Some banks deny that they are reluctant to provide financing for green technology initiatives and claim that they will lend as long as internal lending guidelines are met and investors are able to secure certification from relevant authorities.
United Overseas Bank (M) Bhd senior vice-president and senior head of bumiputra business banking division Mohd Fhauzi Muridan said: “We treat all customers equally. Any application for financing is assessed according to our internal lending guidelines and applied equally to all customers.
“The only additional criterion for Green Technology Financing Scheme (GTFS) is that companies will need to provide the project certification from the Malaysian Green Technology Corp (MGTC) and the Ministry of Energy, Green Technology and Water,” he told StarBiz.
He said the Government assisted these companies by providing a certain level of financial guarantee that encouraged financial institutions to give them loans, adding that overlaying this, however, was the bank’s lending guidelines when assessing the various risks associated with a loan application.
According to Mohd Fhauzi, UOB Malaysia has its own internal lending guidelines and these guidelines would apply equally to all customers from all industries and sectors. These guidelines, he noted, were consistent with best practices and aligned with existing regulatory requirements.
Applicants who had viable project approved by the ministry and able to meet the bank’s lending guidelines would definitely be considered by the bank, he said.
Bernama recently reported that the slow assimilation of green technology in the country was due to the reluctance of banks to provide financing. It cited Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui as saying the resistance stemmed from the assumption by financial institutions that green technology was still new here compared with some other countries.
Chin also felt financial institutions were adopting a wait-and-see attitude instead of taking risks.
He added so far, MGTC had green project certification for 55 projects out of 71 applications, whereby only nine projects had been offered financing and the rest were depending on banks for money.
Concurring with Mohd Fhauzi, HSBC Bank Malaysia Bhd managing director for commercial banking David Morton said: “We do not have stringent requirements for GTFS applications as our criteria for the access to such financing are also no more stringent than any application for general financing with us.
“As long as companies go through the proper application process and obtain the required certification from MGTC, HSBC is keen to consider providing assistance for this scheme. As such, we will support where possible, those companies looking to ‘going green’ for a sustainable business.”
Meanwhile, Malaysian Rating Corp Bhd vice-president and head of financial institution ratings Anandakumar Jegarasasingam said banks were likely to exhibit risk aversion towards financing green energy projects that were yet to show any sustainable commercial potential.
It should also be noted that most Malaysian banks did not have the necessary expertise to evaluate green energy project proposals at this stage, he added.
Anandakumar instead proposed that the Government set up a clean energy fund if it wished to stimulate the financing of green energy projects in a speedier way.
He said the fund could be funded by the Government and administered by an existing government-controlled development bank.
