Green Technology sector gets a Boost
Increased government financing to Malaysian green technology companies seeks to boost the sector. Photo Credit: Pixabay
When it comes to green technology, Malaysia’s government means business. That’s the conclusion we can draw from the fact that Putrajaya has doubled the financing limit in its Green Technology Financing Scheme (GTFS) from RM50 million to RM100 million. The financial boost to the scheme is certainly a welcome development.
The GTFS seeks to boost the country’s green technology sector by offering financing for green companies to a planned total of RM3.5 billion by December 2017. GTFS offers an annual rebate of 2% on interest or profit rates charged by financial institutions; it also provides a government guarantee of 60% for the green costs of the financed amount.
“We applaud the government for their foresight in increasing the financing limit for green technology producers. This is a clear sign of [its] commitment to enhance Malaysia’s green technology sector,” said Syed Ahmad Syed Mustafa, CEO of GreenTech Catalyst, a subsidiary of GreenTech Malaysia. “As the Malaysian green technology market expands, the number and scope of projects in green technology are growing in tandem which in turn is driving up the demand for financing,” he added. “The raised limit will encourage companies to take on larger scale green projects providing a substantial boost for the local green market.”
The green technology financing scheme was set up in 2010 to aid the development of homegrown green technology companies. By this past July, a total of 243 projects had received the government’s seal of approval with financing amounting to RM2.79 billion. The financing scheme has benefited green technology companies in the energy, transport, building, waste management, and water management sectors. “It is anticipated that these projects would help avoid 3.14 million tonnes of carbon dioxide equivalent per year, while generating RM5.51 billion in green investments and creating over 4,000 jobs,” Eco-Business notes.
The GTFS has been seen by experts as instrumental for growing green businesses and start-ups in the country by offering them access to readily accessible funds. Last year the scheme green-lighted financing to 61 green projects with a total of loan approvals amounting to RM533.7 million. “The GTFS has also created green investments worth RM5.51 billion [and] 4,072 green employment opportunities,” Syed Ahmad said.
In recent years Malaysia has come a long way in the development of homegrown green technology. There is plenty of room for growth, though.