More banks offer green technology financing

Monday August 30, 2010

BY DALJIT DHESI
daljit@thestar.com.my

Environmental business grows
PETALING JAYA: More banks in Malaysia are going into green technology financing in view of the potential market for environmental business amid surging levels of greenhouse gases.
Although green financing has not taken off in a big way in Malaysia compared with developed countries, it has been gaining prominence.
Sumitomo Mitsui Banking Corp (Japan), one of the five foreign commercial banks which recently received licences to operate in the country, has teamed up with the Federation of Malaysian Manufacturers (FMM) to provide US$200mil financing for local manufacturers.

Lim Hong Tat ... ‘Maybank has also financed green projects in the Philippines, Indonesia, China and Vietnam.’

The financing, the first of its kind in the country, would be used to fund various types of “green initiatives” including renewable energy, recycling and waste management projects, according to FMM.
The Government had set up a RM1.5bil Green Technology Financing Scheme (GTFS) under Budget 2010 to encourage the supply and usage of green technologies, especially in energy, water and waste management industries.
CIMB Bank had also teamed up with Credit Guarantee Corp Malaysia Bhd to promote GTFS and would contribute up to RM150mil for the scheme.
On the RM1.5bil GTFS, Energy, Green Technology and Water Minister Datuk Seri Peter Chin was reported as saying the banks had to date approved RM161mil for six companies that planned to reduce carbon by 114,691 tonnes.
So far, a total of 43 projects had been approved for the GTFS, he noted.
HSBC Bank Malaysia Bhd managing director for commercial banking David Morton said as a participant of the scheme, the bank’s relationship managers had been working with customers to identify projects that employed the use of green technology and guide them on the availability of funding via this scheme.

Nirukt Sapru ... ‘Green financing is open to all sectors, including biomass and biofuels.’

The bank had also been running its Commercial Banking Green Campaign since November 2009 to encourage customers to conduct their business in a sustainable manner while reinforcing the bank’s commitment to environmental protection, he added.
The campaign, which ends in October, offers customers special “green financing” rates with HSBC’s Industrial Hire Purchase-i and Leasing-i offering.
On the allocation of loans, Morton said HSBC did not have a limit for this type of financing and it was always on the lookout for suitable proposals for viable projects.
“We encourage any profitable and sustainable business to approach HSBC to apply for financing in this area,” he told StarBiz.
Malayan Banking Bhd (Maybank) deputy president and head of community financial services Lim Hong Tat said the bank was ready to provide advice and financial assistance to companies intending to upgrade their manufacturing process, “green” their premises or go into large-scale implementation of clean development mechanism, biomass and other energy projects.
He did not divulge the amount of financing disbursed or available.
Green projects financed locally by Maybank include waste water treatment plants, solid waste recycling plant, oil palm biomass steam powered generator and construction of green buildings.
The bank had also financed green projects in its operations in the Philippines, Indonesia, China and Vietnam, Lim noted.
Standard Chartered Bank Malaysia Bhd managing director of origination and client coverage, wholesale banking, Nirukt Sapru, said “green financing” was open to all sectors, including biomass and biofuels.
“With our track record, expertise and international network in sustainable financing, we are able to play a key role in Malaysia – as we have done so in other markets in supporting the shift – as more corporates in Malaysia look towards growth and expansion opportunities, leveraging on green financing and best practices,” he added.
Citing some of the challenges in green financing, Morton said although recent events had increased awareness of the importance of sustaining the environment, the strong push and pull factors for companies to go green in Malaysia were relatively absent.
“For companies, the choice of employing ‘green’ technology remains very much profit-driven. Demand for green financing at the moment is relatively slow given its dependence on the pace of adoption of green technology and practices,” he added.
Lim said also said Malaysian businesses should strive to better understand what green technology really meant by engaging experts on the subject.
Meanwhile, ACCA global head of sustainability and corporate social responsibility Henning Dräger said ACCA was actively involved in stakeholder forums and working groups that dealt with green technology finance.
ACCA’s role was to follow developments in this sector on behalf of students who might want to join this industry in the future and inform members of relevant initiatives.
“We are also asked to provide expert input to questions about return on investment for low carbon technologies and carbon accounting frameworks which are part of our sustainability remit,” Dräger added.

Renewable energy a growth sector for Malaysia

Thestar: Saturday August 28, 2010

By ELAINE ANG
elaine@thestar.com.my

The Star will feature a series of stories in conjunction with StarBiz-ICRM Corporate Responsibility Awards. The CR Awards is the result of a partnership between The Star and Institute of Corporate Responsibility Malaysia (ICRM), supported by the Securities Commission and Bursa Malaysia Bhd. Its working partners are PricewaterhouseCoopers (PwC) and Securities Industry Development Corp.
THE renewable energy sector is fast gaining ground as a new growth area for many countries worldwide with the vast potential it presents environmentally and economically.
Renewable energy plays a major role in meeting a country’s energy needs, enabling businesses to reap energy cost savings and revenue while combating global warming.
On the homefront, renewable energy is seen as a growth sector that will help propel the country into a high-income economy.
The sector, however, is still relatively undeveloped in the country as reflected in the low achievement of renewable energy targets under the Ninth Malaysia Plan (9MP).
According to PricewaterhouseCoopers Advisory Services associate director (sustainability and climate change) Mark Wong, the 9MP targeted the production of 350MW of grid-connected electricity from renewable sources, translating into 1.8% of electricity mix.
“However, only 53MW was achieved by the end of 2009, or 15% of the targeted capacity,” he said.
The 10th Malaysia Plan (10MP) re-emphasised the use of renewable energy to meet Malaysia’s growing energy demands, in particular hydro power for electricity generation and blending of biofuels for transport sector.
Two of the steps taken by the Government to help boost development in renewable energy sector is the plan to implement a feed-in tariff programme later this year and the mandatory blending of biofuels for transport sector in 2011.

Wong said renewable energy was expected to contribute about 6% of the country’s electricity production mix in the next five years and about 11% by 2020.
“Renewable energy is often perceived to be a green initiative that is something nice to do. What needs to be understood is that there is a strong business case for renewable energy sector in the long term,” he said.
Renewable energy advisor to the Energy, Green Technology and Water Ministry, Ahmad Hadri Haris, had said in a report that based on projections by experts, the sector could provide at least RM70bil worth of revenue for the private sector and potentially generate tax revenue of at least RM1.76bil for the Government by 2020.
Another economic and social benefit arising from the sector is job creation. Experts have estimated that at least 52,000 jobs could be created from the construction, operation and maintenance of renewable energy plants in the country by 2020.
ACCA Global head of sustainability and corporate social responsibility Henning Drager said there was a strong recognition that the dependence on fossil fuels needed to be curtailed. This is based on the Government’s support of renewables as reflected in the National Renewable Energy Policy and Action Plan.
“Communities, industries, businesses and households need a reliable energy supply to prosper.
“Ramping up the renewable energy generation percentage is crucial if Malaysia is serious about reducing fossil fuels’ contribution to climate change, addressing energy security issues around importing oil and coal from unstable global regions, and the creation of skilled and unskilled jobs in the domestic renewables sector.”
Latest projections by the Organisation for Economic Cooperation and Development is that renewable energy, especially solar power, could play a large role in Malaysia’s future energy generation. This is because the country is blessed with over 250 days of sunshine a year, thus providing great potential to meet the energy needs of businesses and communities.
Amsterdam-based international expert on corporate responsibility and sustainable development, Paul Hohnen, concurred.
He said the country’s challenges in the long term included the transition from its reliance on finite supplies of oil and gas to renewable sources such as solar power and also to ensure maximum diversity and sustainability of its ecosystems.
“At the end of the day, the sun is Malaysia’s greatest renewable asset. It sustainably powers forests and farms, as well as tourism. But there is still much untapped potential and this is where much of the growth potential is.
“If Malaysia can achieve this transition, it will create firm foundations not only for domestic solar power industries but also industries based on plant genetic diversity (such as medicines), and sustainable crops for fuel, food, fibre and fertilisation,” he said.
Drager said significant upfront investment would be required to increase the contribution of renewables based on a thorough assessment of their respective generation potential.
“Addressing any structural, political and cultural barriers to redirecting government subsidies towards this sector will be a key element for future success,” he added.
Drager said a detailed renewables job creation programme would need to be worked out by the Government to match the skills based on the renewables ambition.
“The programme should also address Malaysia’s high-income model because the highly-skilled labour required, including engineers, electricians and project managers, will be able to demand salary premiums and create aspirations around joining Malaysia’s renewables drive.”
Concrete measures and frameworks needed to be worked out across stakeholder groups and these include low and no interest loans, longer return-on-investment timelines, tax incentives and ambitious renewables targets, he said.
> To participate in StarBiz-ICRM Corporate Responsibility Awards 2010, you will need to fill out an online questionnaire. Submission closes on Sept 24. The online questionnaire is accessible at
http://www.asiacall.net/survey/starbizicrm2010/. Further questions can be directed to
starbiz-icrm@csr-asia.com or call 03-2072 2130 or 03-2070-0130. For more information, log on to
http://www.thestar.com.my/starbizicrm/.

StarBiz-ICRM Corporate Responsibility Awards 2010: Workshop to assist companies to fill out survey

IN conjunction with the StarBiz-ICRM Corporate Responsibility Awards 2010, CSR Asia in association with the organisers , StarBiz and ICRM, will conduct a workshop to assist companies with completing the survey.
The workshop will be held at Cyberhub on 1st Floor, Menara Star, Section 16, Petaling Jaya from 9.30–11.00 am on Sept 2. For those attending the workshop, kindly bring along your laptop to access the survey online or a printed copy of the survey.
For those who cannot make it during that time, CSR Asia staff will be on hand for the rest of the day at the same venue to answer your questions. Companies that have difficulties completing the survey or require further guidance and information are strongly encouraged to attend this workshop.

Higher supply of power for peninsula

Thestar: Monday August 16, 2010

By YAP LENG KUEN
lengkuen@thestar.com.my

Ministry plans plant-up of an additional 2,000 MW
PUTRAJAYA: The Energy, Green Technology and Water Ministry is planning for the plant-up of an additional 2,000 MW of power, which is 400 MW higher than the amount originally sought from the Bakun dam.
“As the economy picks up amid the bullish projections, it is safer for Peninsular Malaysia, in terms of industrialisation, to ensure that the power supplied exceeds the amount that was planned under the previous submarine cable transmission project from Bakun to the peninsula,’’ Minister Datuk Seri Peter Chin told StarBiz.
“When we do the planning, we look at two things: to provide the necessary power to make up for the loss from Bakun and retire some of the old plants in the peninsula,’’ he said.
Chin was referring to the scrapped undersea cable project that was supposed to transmit 1,600 MW to the peninsula via two cables of 800 MW each.

Datuk Seri Peter Chin Fah Kui … ‘The investment in cable transmission is tremendous and would reflect on the tariffs.’

“The investment in cable transmission is tremendous and would reflect on the tariffs. It is convenient to transmit power from Bakun but if anything goes wrong with the cable, we will be cutting off 1,600 MW of power supply for Peninsular Malaysia,’’ he said.

The Energy Commission hopes to identify the power company that will plant up an additional 1,000 MW of electricity by the end of January next year.

The commission is still in the consultative process, evaluating the proposals submitted by three bidders for existing sites – Tenaga Nasional Bhd (Janamanjung), Malakoff Bhd (Tanjung Bin) and Jimah Power Sdn Bhd (Jimah).
The winner of the bid has to ensure that the plant will be operational by the first quarter of 2015.
The second plant can be a greenfield project which probably would take longer to plan, as it involves site investigations and compliance with environmental requirements.

Electricity consumption per capita in Malaysia now stands at about 3,412 kWh a year, significantly higher than most developing countries, but still below the average in developed countries.

It is projected to more than double to 7,571 kWh per person in 2030, higher than that of the Asia Pacific Economic Cooperation region average of 6,833 kWh per person.

Chin said the decision to build a coal-fired plant, instead of using hydropower from Bakun, did put the energy mix into some imbalance.
“We can make up for that in other ways,’’ he said. “With the feed-in-tariff (FIT) to be in place by next year, we anticipate more plant-ups with photovoltaic installations and biomass technology.
“It will take time to build up these renewable energy sources but we hope this trend will continue with people powering their homes with photovoltaic installations,’’ he said.

The Government is planning to implement a FIT policy to encourage industries and households to install solar panels and sell their excess power to utility companies.

The proposed feed-in-tariff is being drafted and is expected to be passed into law by parliament by the end of the year.

Once passed, the FIT could enable industries and households to sell power to the main grid during the day and buy it at night.
In Peninsular Malaysia, the excess power can be sold to Tenaga Nasional Bhd, while in Sarawak, it can be sold to Sarawak Energy Bhd.

Two meters have to be installed in households and industries that adopt the FIT system – one for power sold and the other for consumption.

According to reports in July, the rates for electricity generated from renewable energy resources to be purchased by utility companies would be decided once the policy had been passed into law.

However, for Sarawak, the purchase rates would be decided by Sarawak Energy.

The FIT policy, which falls under the country’s national renewable energy policy and action plan, aims to encourage the public to work alongside the Government to generate green and sustainable electricity.

“Although prices are expensive, the world trend per kilowatt is dropping very fast,’’ Chin said.

Currently, a solar power panel that produces one kilowatt costs about RM25,000. A household normally requires a two-kilowatt solar panel.