The Ministry of Energy, Green Technology and Water has proposed in Budget 2015 the setting up of an Islamic green bank and the exemption of Goods and Services Tax (GST) on green products.
“The proposed establishment of a green bank is an upgrade of the ministry’s Green Technology Financing Scheme (GTFS), launched in 2010 to offer loans to green projects through commercial lenders,” said Malaysian Green Technology Corp chief executive officer, Ahmad Hadri Haris.
Malaysian Green Technology is a not-for-profit organisation under the purview of the ministry.
The GTFS scheme, which had approved 145 projects with a fund injection of nearly RM2 billion as at July this year, offers financing through commercial lenders.
“Commercial lenders require a stringent approval process, such as the evaluation of a company’s size and capital, as well as the commercial value of a project seeking funds.
“The establishment of a dedicated venture capital fund will help spur the growth of the green technologies,” Ahmad Hadri told reporters on the sidelines of the sneak preview of the fifth International Green Tech & Eco Products Exhibition and Conference Malaysia, here today.
He said the proposed green bank would follow the business model of Malaysia Venture Capital Management Bhd, a wholly-owned subsidiary of the Minister of Finance Inc.
“The seed capital for the green bank will not come from the government, but be raised internationally such as India, China or the Middle East,” Ahmad Hadri said.
Ahmad Hadri said the green bank was targeted as a syariah-compliant venture capital fund to set it apart from other green banks, such as those in the US, the UK and Japan.
Meanwhile, the ministry has also proposed for GST exemption on green products having the MyHijau Mark.
Under the proposal, those purchasing energy-saving electrical appliances could be exempted from the GST, which will take effect on Apr 1, 2015.
