Meta Data

Draft:

Revision of previous policy?:

Yes

Effective Start Year:

2019

Effective End Year:

2021

Scope:

National

Document Type:

Programme

Economic Sector:

Energy, Power, Multi-Sector

Energy Types:

Power, Renewable, Bioenergy, Solar, Wind, Other

Issued by:

Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC)

Source:

Green Technology Financing Scheme (Intro)

Green Technology Financing Scheme

File:

Green Technology Financing Scheme 2.0 (GTFS 2.0) (Intro)

Green Technology Financing Scheme 2.0 (GTFS 2.0)

Overall Summary:

The Green Technology Financing Scheme 2.0 (GTFS 2.0) is a financing scheme offered to investors which is supported by the government offering a 2% p.a. interest/profit rate subsidy for the first seven years and 60% government guarantee of green component cost to financial institutions.

Efficiency

Energy Service Companies (ESCOs):

GTFS 2.0 also offer a financial support (subject to only to the green technology/component cost finance by Participating Financial Institutions (PFIs)) for Producer, User and also offer a financial support to a new category, which is for Energy Services Companies (ESCOs) also offer a rebate of 2% on interest/profit, is to accelerate the expansion of green investments by providing easier access to funding via financing from Participating Financial Institutions (PFIs) with a total funding earmarked up to RM2.0 billion.

Governance

Energy institutional structures:

Malaysian Green Technology Corporation (GreenTech Malaysia), Credit Guarantee Corporation Malaysia Berhad (CGC) are the agencies tasked with administering the Scheme. GreenTech Malaysia is responsible for the promotion, assessment, certification and monitoring to Producers, Users & ESCOs under the Scheme, while CGC is responsible to manage, administer and monitor the scheme which includes the verification and process of guarantee applications, subsidy reimbursements, claim payments and reports to the Government.

Full Document Text

INTRODUCTION OF GREEN TECHNOLOGY FINANCING SCHEME 2.0 (GTFS 2.0)

As part of the effort to ensure continuous supports toward Green Technology projects, the Ministry of Finance has agreed to the recommendation proposed by Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC), with several enhancement and improvement to the scheme and known as GTFS 2.0.

All applications of the Scheme are channeled to Malaysian Green Technology Corporation (GreenTech Malaysia) on which conducts the initial screening and certification prior to applying financing from financial institutions. The Scheme is made available until 31 December 2020 or upon reaching a total financing/funding approval amount of RM2.0 billion whichever is earlier or any subsequent extension on the availability date expected to facilitate the growth of local green businesses and generates new markets and job creation.

In April 2018, the MOF had approved an extension of the GTFS known as GTFS 2.0 with a financing amount earmarked up to RM 5.0 billion. The Scheme was later launched on 3rd May 2018 in Kudat, Sabah. However, after the 14th General Election in May 2018, the new Government administration had decided to discontinue the Scheme. Later, on 6th March 2019, MOF had approved to reinstate GTFS 2.0 with the allocation of RM 2.0 billion for the period of January 2019 until the end of 2020. The Scheme which will last for two (2) years will be offering a 2% p.a. interest/profit rate subsidy for the first seven years with 60% government guarantee on the financing.

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FEATURES OF GTFS 2.0

A summary of the latest salient terms (effective 1^st January 2019) of the scheme are as follows:

Features	Producer of Green Technology	User of Green Technolgy	ESCOs
Purpose	To finance investment for the production of green products	To finance investment for the utilization of green technology	To finance investment or assets related to energy effiecient project and/ or energy performance contracting
Financing Size	Maximum: RM100 million per group of company	Maximum: RM50 million per group of company	Maximum: RM25 million per group of company
Financing Tenure	Up to 15 years	Up to 10 years	Up to 5 years
Eligibility	Company or Business must be legally registered Malaysian with a simple majority of at least 51% Malaysian shareholding Minimum paid-up capital must be10% or RM50,000 of project cost, whichever is higher
Participating Financial Institutions (PFIs)	All Commercial Financial Institutions, Islamic Financial Institutions and Development Financial Institutions as per BNM & other participating entities duly approved by MOF
Government Incentives	Rebate of 2% per annum on interest/ profit rate (limited to the first seven (7) years only) for each loan/financing. 60% government guarantee on Green Technology Cost.
Interest/ Profit Rate	Determine by Participating Financial Institutions (PFI's) for financing
Source of Fund	Participating Financial Institutions (PFI's)
Implementation Agencies	Ministry of Environment and Water, Credit Guarantee Corporation Malaysia Berhad (CGC) and MGTC
Application Method	Application are to sublit application to MGTC at www.gtfs.my for green project certification. The successful applicant then proceeds to forward application for financing to any Participating Financial Institutions (PFI's)
Application Date	The Scheme will be opened until 31 December 2020 or upon approval of financing/ funding issuance up to RM2.0 billion, whichever is earlier or any subsequent extension on the availability date.
Processing Fee	0.25% - Financing tenure of 10 years and less 0.50% - Financing tenure of more than 10 years The above processing fee is subject to green component cost apply or approved, subject to a minimum processing fee of RM8,000 (payable upfront upon submission of the application), payable to Malaysian Green Technology and Climate Change Centre. (No maximum ceiling) A processing fee of RM4,000 is payable for request to extend the validity of the project certificate (for 2^nd and 3^rdextension). Each extension on the validity is only for a period of 6 months. A processing fee of RM8,000 is payable for any request to vary the information on the certificate. Note: Processing fee paid shall be refunded should; the application for green project certificate rejected by the Technical committee the applicant company fail to secure financing under the scheme after the 3rd extension of the certificate validity. The amount to be refunded shall be after deduction of minimum RM8,000 processing fee and plus any other expenses incurred during the technical assessment.

Note *: The maximum financing size/amount shall be aggregated and limited based on Single Group Exposure Limit.

Group Exposure is defined as:

Companies having common directorship/management which include an individual who exercises control over a company or companies either directly or indirectly.
Companies having common ownership/shareholding i.e. shareholding of over 50%.
Subsidiary companies.

Only new, retrofitting or expansion projects and energy performance contracting that incorporate Green Technology elements that have not been funded are eligible for funding under the Scheme.

The Scheme is applicable to fund the purchase of equipment and financing can be for both new and re-conditioned equipment. A list of approved Green Components shall be provided by GreenTech Malaysia with issuance of the Green Project Certificate.

The Scheme is also available for the financing of working capital for the purchase of raw materials. The maximum financing tenure allowed for working capital is 5 years and maximum financing amount is RM5 million.

Reimbursement for advance payments included as part of the financing granted by PFI is allowed under the Scheme, subject to advances made on or after the Green Project Certificate date. Any advances made before the certification date is not eligible for reimbursement under this Scheme.

Applications for the following purposes are NOT eligible under this Scheme:

For refinancing or restructuring of existing facilities;
For financing Research and Development cost; or
For projects which have already been completed and financed.