KUALA LUMPUR: The Energy, Green Technology and Water Ministry (KeTTHA) may set up an institution to handle green financing if the remaining RM1.7 billion available under the Green Technology Financing Scheme (GTFS) is taken up quickly.
“The Finance Ministry has been looking at that for some time. There are still a lot of processes to be done but with the incoming of green sukuk, that has given a boost of confidence in the finance sector. We are analysing the first GTFS. It will depend on the response,” said Energy, Green Technology and Water Minister Datuk Seri Panglima Dr Maximus Johnity Ongkili.
Speaking to reporters at the opening ceremony of the 8th International Greentech & Eco Products Exhibition & Conference Malaysia (IGEM 2017), Ongkili said the proposal for an institution is worth considering but it would have to study the market before turning the scheme into a bank, for instance.
“I think it is certainly on the agenda. We need to work at it. Number one is the mechanism, number two is the size. These are important. My own take is, if the remaining RM1.7 billion is finished quickly, then it is time to set up a proper institution to handle green financing,” he added.
The GTFS was introduced by the government in 2010, aimed at enabling easier access to financing for new green entrepreneurs. To date, it has facilitated over RM3.385 billion in funds for more than 302 green projects. Upon completion, these projects will have the potential to generate RM6.468 billion worth of green investments, create over 4,943 jobs and avert emissions amounting to 3.513 million tonnes of CO2eq.
There is another RM1.7 billion available under the scheme and the government has decided to extend the scheme, adding another RM5 billion for the next five years, to provide access to more entrepreneurs.
Meanwhile, Bank Negara Malaysia, Securities Commission Malaysia and the World Bank Group are currently developing an ecosystem to facilitate the growth of the clean financing portfolio to further promote green financing. Ongkili said the green sukuk has introduced an innovative financial instrument to accommodate global infrastructure needs and green financing.
On the number of bonds to be issued under the green sukuk, he said it would depend on those who won the bidding.
Read the original story on: TheSunDaily.My