FINANCIAL INSTITUTIONS SHOULD SUPPORT GREEN ECONOMY, SAYS MALAYSIAN PM NAJIB

KUALA LUMPUR, Sept 8(Bernama) -- Prime Minister of Malaysia Najib Razak
Thursday urged financial institutions, businesses and agencies to work together
more closely and be more innovative in realising the global call for green
technology.

While interest from both businesses and financial institutions have been
strong, Najib said the end result has been less positive.

Last year, the government introduced the Green Technology Financing Scheme
to assist companies that were users and producers of green technology.

To date, 125 applications have been received with 97 approved
projects having been awarded Green certificates valued at more than
RM2 billion (US$670.74 million).

"This may sound tremendously encouraging but there remains a gap between
demand and supply. I have been informed that out of the 97 Green Certified
projects, only 21 have received letters of offers for loans from financial
institutions.

"I urge all parties to rise to this challenge and play their role in
supporting the development of green economy to the fullest," he said at the
launch of the 2nd International Greentech & Eco Products Exhibition & Conference
Malaysia (IGEM 2011) here Thursday.

Najib also launched the Low Carbon Cities Framework and Assessment System
in line with Malaysia's transition towards a low carbon economy and to
reduce carbon dioxide emission by 40 per cent in 2020.

"It has long been my aspiration to develop both Putrajaya and Cyberjaya as
shining examples of eco-friendly townships and to replicate this in other towns
and cities across Malaysia," he said.

The Low Carbon Cities Framework is intended to help local councils, town
planners and developers formulate action plans to cut carbon emission.

Najib also said there was tremendous potential for green technology growth
in Malaysia, especially within the four target sectors namely energy,
construction, transportation, water and waste management.

Meanwhile, Minister of Energy, Green Technology and Water Peter
Chin Fah Kui said the banking sector should be more bullish in terms of
providing loans to the industries that used green technology in their processes.

"I think banks should be more forthcoming in their loan portfolios for these
types of industries. Certainly there is much that they can do," he said.

Chin said there were foreign banks that were interested in such projects.

"I'm encouraged by the fact that there are foreign banks like Japan's
Sumitomo Bank which is coming in with big to establish an environmental fund
which will be used for green technologies. I had fruitful discussions with them
recently. We are trying to work with them on how to finance solar panel being
installed in houses. Hopefully, we'll come up with a system," he said.

"I wish every bank could look at things in that sort of positive light,
especially our local banks," he added.

Chin said the fear of failure of the high risk of these projects could be
the reasons why for local banks were not supportive of green projects.

"There is some risk of course. Every loan has a risk. No loan is 100 per
cent guaranteed. But, we have to be proactive in certain areas," he added.

He also said in green financing, the government had already provided some
buffer for the risk.

"There is the Credit Guarantee Corporation which guaranteed 60 per cent of
the loans given.

"So, basically financial institutions are only taking up 40 per cent of the
risk. The scheme itself is already reducing the risk for the banks and yet they
are still not up to it.

"They don't accept the challenge in providing the green financing," Chin
added.

-- BERNAMA