CGC teams up with CIMB to promote green tech financing scheme

KUALA LUMPUR: Credit Guarantee Corporation Malaysia Bhd (CGC) has entered into a partnership with CIMB Bank Bhd to promote the Green TECHNOLOGY [] Financing Scheme (GTFS) to producers and users of environmental friendly technology.

In a statement today, CGC said CIMB Bank, the country's second biggest lender based on asset, would provide up to RM150 million in financing for the GTFS.

CGC, which is spearheading the marketing and promotion of GTFS, is committed to a three-day turnaround time to process GTFS applications received from CIMB Bank.

"We are confident that this three-day turnaround commitment would help to further expedite the approval and disbursement of the funds to borrowers, a special arrangement that we have made with CIMB Bank in view of their participation in supporting the GTFS, the first bank to do so in Malaysia," said CGC's managing director Datuk Wan Azhar Wan Ahmad.

CGC has been mandated to provide 60% guarantee to borrowers of GTFS, effectively covering RM900 million out of the total RM1.5 billion established by the government to improve the supply and utilisation of green technology. The remaining 40% financing risk shall be borne by the participating financial institutions (PFIs).

The producers of green technology can avail financing of up to RM50 million and users, a maximum of RM10 million. The financing tenure is up to 15 years and 10 years for producers and users, respectively.

Wan Azhar said borrowers would be charged an annual guarantee fee of 0.5% for GTFS, a small percentage compared to fees charged for other CGC schemes that were calculated based on the risk-profile of the borrower. In addition, the cost of borrowing is cushioned by the 2% interest/profit rate subsidy provided by the government.

He said CGC had been stepping up its promotional efforts to create awareness of the huge potential in this sector through its participation in various exhibitions and seminars organised by trade associations and business chambers nationwide.

"Soon we will be running an advertising campaign to further increase awareness of the scheme not only amongst the producers and users but also amongst the general public with the objective of enlightening them on the impact of green technology on the environment and the general well-being of the Malaysian populace," said Wan Azhar.

He said the response to the GTFS had been very encouraging with more than 470 companies having registered with the National Green Technology Centre and enquired on how to avail themselves to the scheme.

CGC said the scheme, which was officially launched by Prime Minister Datuk Seri Najib Razak on Jan 26, 2010, was expected to provide benefits to more than 140 companies within the next two to three years. The GTFS was rolled out on Jan 1, 2010