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Maybank Group
V 1
GREEN TECHNOLOGY FINANCING SCHEME
&
LOAN APPROVAL CONSIDERATIONS
•
EU – Malaysia Biomass
Entrepreneurs Nurturing Programme
PNB Darby Park
Kuala Lumpur
Presenter : Irene Khoo Poh ChinHead, Business Centre Petaling Jaya & Bandar Sri Damansara
� Maybank’s Initiatives in Green Financing
� GTFS Key Features & Application Process
� GTFS through Maybank
� Other Financing Options & Sources
� Lending Considerations
TOPICSTOPICSTOPICSTOPICS
Green Projects Financed by Maybank
� Wastewater treatment
� Recycling of used computers
� Recycling of plastic containers
� Manufacturing reclaimed & crumb rubber
� River water treatment for domestic/ industrial use
� Processing scrap iron
� Bio-fertilizers
� Solid waste management recycling (plant)
� Oil waste recovery (plant)
MAYBANK’S INITIATIVESMAYBANK’S INITIATIVESMAYBANK’S INITIATIVESMAYBANK’S INITIATIVES
FINANCING OPTIONS/ SOURCES FOR GREEN PROJECTSFINANCING OPTIONS/ SOURCES FOR GREEN PROJECTSFINANCING OPTIONS/ SOURCES FOR GREEN PROJECTSFINANCING OPTIONS/ SOURCES FOR GREEN PROJECTS
EQUITY � Sponsors� FDI� Venture Capital� Government Support
CAPEX
WORKINGCAPITAL
� FDI� Bank Term Lending/
Hire Purchase/ Leasing� Bank Trade Finance� Bank Structured Finance� Syndicated Loan� Government Soft Loans/GTFS
� Bank Overdraft/ Trade Financing� Receivables Financing� Bank Guarantee (Non-Cash)
To promote green technology, the Government will establish a fund amounting to
RM 1.5 billion. This fund will provide soft loan to companies that supplies and
utilize green technology. For suppliers, the maximum financing is RM50 million
and for companies RM 10 million. The Government will bear 2% of the total
interest rate. In addition, the government will provide a guarantee of 60% on the
financing amount, with the remaining 40% by the banking institutions. Loan
applications can be made through the National Green Technology Centre.
This scheme will commence on 1 January 2010 and is expected to
benefit 140 companies
Government support:
bear interest/profit - 2% p.a.
Government Guarantee- 60%
User of GT:Max. financing is RM 10 million
Producer of GT:Max. financing is RM 50 million
Effective Date:
1 Jan 2010
Fund:RM 1.5 billion
Target:140 companies
BUDGET SPEECH PRIME MINISTER ON 23 OCT 2009BUDGET SPEECH PRIME MINISTER ON 23 OCT 2009BUDGET SPEECH PRIME MINISTER ON 23 OCT 2009BUDGET SPEECH PRIME MINISTER ON 23 OCT 2009
FEATURESFEATURESFEATURESFEATURES PRODUCER OF PRODUCER OF PRODUCER OF PRODUCER OF
GREEN TECHNOLOGYGREEN TECHNOLOGYGREEN TECHNOLOGYGREEN TECHNOLOGY
USER OFUSER OFUSER OFUSER OF
GREEN TECHNOLOGYGREEN TECHNOLOGYGREEN TECHNOLOGYGREEN TECHNOLOGY
Financing sizeFinancing sizeFinancing sizeFinancing size Maximum: RM50 million per Maximum: RM50 million per Maximum: RM50 million per Maximum: RM50 million per
companycompanycompanycompany
Maximum: RM10 million per Maximum: RM10 million per Maximum: RM10 million per Maximum: RM10 million per
companycompanycompanycompany
Financing tenure Financing tenure Financing tenure Financing tenure Up to 15 yearsUp to 15 yearsUp to 15 yearsUp to 15 years Up to 10 yearsUp to 10 yearsUp to 10 yearsUp to 10 years
Purpose of financing Purpose of financing Purpose of financing Purpose of financing To finance investments in To finance investments in To finance investments in To finance investments in
production of green production of green production of green production of green
technologies that meet the technologies that meet the technologies that meet the technologies that meet the
Scheme objective Scheme objective Scheme objective Scheme objective
To finance investments in To finance investments in To finance investments in To finance investments in
utilisation of green technologies utilisation of green technologies utilisation of green technologies utilisation of green technologies
that meet the Scheme objectivethat meet the Scheme objectivethat meet the Scheme objectivethat meet the Scheme objective
Eligibility criteria Eligibility criteria Eligibility criteria Eligibility criteria Legally registered Malaysian Legally registered Malaysian Legally registered Malaysian Legally registered Malaysian ----
owned companies (at least 51%) owned companies (at least 51%) owned companies (at least 51%) owned companies (at least 51%)
in all economic sectors in all economic sectors in all economic sectors in all economic sectors
Legally registered Malaysian Legally registered Malaysian Legally registered Malaysian Legally registered Malaysian ----
owned companies (at least 70%) in owned companies (at least 70%) in owned companies (at least 70%) in owned companies (at least 70%) in
all economic sectorsall economic sectorsall economic sectorsall economic sectors
Participating financial Participating financial Participating financial Participating financial
institutions (PFIs)institutions (PFIs)institutions (PFIs)institutions (PFIs)
All commercial and Islamic Banks All commercial and Islamic Banks All commercial and Islamic Banks All commercial and Islamic Banks
Development financial institutions (Development financial institutions (Development financial institutions (Development financial institutions (Bank Pembangunan, SME Bank, Bank Pembangunan, SME Bank, Bank Pembangunan, SME Bank, Bank Pembangunan, SME Bank,
Agrobank, Bank Rakyat, EXIM & Bank and Bank Simpanan NasionalAgrobank, Bank Rakyat, EXIM & Bank and Bank Simpanan NasionalAgrobank, Bank Rakyat, EXIM & Bank and Bank Simpanan NasionalAgrobank, Bank Rakyat, EXIM & Bank and Bank Simpanan Nasional )
GTFS KEY FEATURESGTFS KEY FEATURESGTFS KEY FEATURESGTFS KEY FEATURES
Government Government Government Government
incentiveincentiveincentiveincentive
Government bear 2% interest rate/profitGovernment bear 2% interest rate/profitGovernment bear 2% interest rate/profitGovernment bear 2% interest rate/profit
Government guarantee Government guarantee Government guarantee Government guarantee –––– 60% of financing approved amount60% of financing approved amount60% of financing approved amount60% of financing approved amount
Guarantee feeGuarantee feeGuarantee feeGuarantee fee 0.5% p.a. from the total guaranteed amount0.5% p.a. from the total guaranteed amount0.5% p.a. from the total guaranteed amount0.5% p.a. from the total guaranteed amount
Interest/financing Interest/financing Interest/financing Interest/financing
rates rates rates rates
Determined by participating financial institutionsDetermined by participating financial institutionsDetermined by participating financial institutionsDetermined by participating financial institutions
Source of fundsSource of fundsSource of fundsSource of funds Participating financial institutionsParticipating financial institutionsParticipating financial institutionsParticipating financial institutions
Implementation Implementation Implementation Implementation
agencyagencyagencyagency
(1) Malaysian Green Technology Corporation (MGTC)(1) Malaysian Green Technology Corporation (MGTC)(1) Malaysian Green Technology Corporation (MGTC)(1) Malaysian Green Technology Corporation (MGTC)
(2) Credit Guarantee Corporation Malaysia Bhd. (CGC)(2) Credit Guarantee Corporation Malaysia Bhd. (CGC)(2) Credit Guarantee Corporation Malaysia Bhd. (CGC)(2) Credit Guarantee Corporation Malaysia Bhd. (CGC)
Application methodApplication methodApplication methodApplication method Companies are required to submit project proposal/s for technical Companies are required to submit project proposal/s for technical Companies are required to submit project proposal/s for technical Companies are required to submit project proposal/s for technical
evaluation to evaluation to evaluation to evaluation to PusatPusatPusatPusat TenagaTenagaTenagaTenaga Malaysia. Upon passing the technical Malaysia. Upon passing the technical Malaysia. Upon passing the technical Malaysia. Upon passing the technical
evaluation, companies may proceed to submit application for financing evaluation, companies may proceed to submit application for financing evaluation, companies may proceed to submit application for financing evaluation, companies may proceed to submit application for financing
to any participating financial institution.to any participating financial institution.to any participating financial institution.to any participating financial institution.
Application datesApplication datesApplication datesApplication dates Applications are open from 1 January 2010 for a period of 3 years or Applications are open from 1 January 2010 for a period of 3 years or Applications are open from 1 January 2010 for a period of 3 years or Applications are open from 1 January 2010 for a period of 3 years or
upon approval of financing up to RM1.5 billion, whichever is earlier. upon approval of financing up to RM1.5 billion, whichever is earlier. upon approval of financing up to RM1.5 billion, whichever is earlier. upon approval of financing up to RM1.5 billion, whichever is earlier.
GTFS KEY FEATURESGTFS KEY FEATURESGTFS KEY FEATURESGTFS KEY FEATURES
A. APPLICATION PROCESSA. APPLICATION PROCESSA. APPLICATION PROCESSA. APPLICATION PROCESS
1. Project Certification (Technical) 1. Project Certification (Technical) 1. Project Certification (Technical) 1. Project Certification (Technical)
2. Financing Application 2. Financing Application 2. Financing Application 2. Financing Application
3. Guarantee Approval 3. Guarantee Approval 3. Guarantee Approval 3. Guarantee Approval
B. FINANCING EXECUTION B. FINANCING EXECUTION B. FINANCING EXECUTION B. FINANCING EXECUTION
4. Agreement and Documentation 4. Agreement and Documentation 4. Agreement and Documentation 4. Agreement and Documentation
5. Fund Disbursement/Repayment 5. Fund Disbursement/Repayment 5. Fund Disbursement/Repayment 5. Fund Disbursement/Repayment
C. PROJECT OUTCOMEC. PROJECT OUTCOMEC. PROJECT OUTCOMEC. PROJECT OUTCOME
6. Project Monitoring and Verification6. Project Monitoring and Verification6. Project Monitoring and Verification6. Project Monitoring and Verification
7. Project Impact7. Project Impact7. Project Impact7. Project Impact
GTFS PROCESS FLOWGTFS PROCESS FLOWGTFS PROCESS FLOWGTFS PROCESS FLOW
Stage 1:
Application
Process
Stage 3:
Project
Outcome
Project certification
Financing application
Guarantee approval
Stage 2:
Financing
Execution
Agreement and
documentation
Disbursement and
repayment
Project monitoring
Project outcome
GTFS PROCESS FLOW CON’TGTFS PROCESS FLOW CON’TGTFS PROCESS FLOW CON’TGTFS PROCESS FLOW CON’T
GTFS APPLICATIONGTFS APPLICATIONGTFS APPLICATIONGTFS APPLICATION
CONTENTS
A. Project Participants
B. Project Description
C. Project Financing
D. Project Monitoring and Verification
E. Submission of Supporting Documents and
Attachment
F. Checklist
Application method: Online E-Application
Website: www.gtfs.my
Supporting document to GreenTech in hard copy
Form GTFS2010
PROCUDURE AND GUIDELINE GTFSPROCUDURE AND GUIDELINE GTFSPROCUDURE AND GUIDELINE GTFSPROCUDURE AND GUIDELINE GTFS
CONTENTS
1.0 Background
2.0 Green Technology Financing Scheme (GTFS)
3.0 Application Guideline
3.1 Who can apply for the GTFS?
3.2 Guideline to fill in application form
3.3 What technology can be funded?
3.4 GTFS technical evaluation Criteria
3.5 List of Green Technology (GT) Products / Equipment / Systems &
Criteria
3.5.1. General Criteria
3.5.2. Project Eligibility Criteria for Energy Sector
3.5.3. Project Eligibility Criteria for Building and Township Sector
3.5.4 Project Eligibility Criteria for Water & Waste Management Sector
3.5.5. Project Eligibility Criteria for Transport Sector
Information at www.gtfs.my
Further information: HOTLINE 1-800-88-4837 EMAIL [email protected]
GTFS PROJECT CERTIFICATEGTFS PROJECT CERTIFICATEGTFS PROJECT CERTIFICATEGTFS PROJECT CERTIFICATE
• Project Certificate will be issued to applicant
once approval received from GTC.
• The certificate consist:
• cert no,
• project name,
• project serial no,
• category,
• sector,
• company name (reg. no)
• GT project cost
• Expiry date (6 + 3 month)
• To apply for loan applicant have to submit
together the Certificate and Summary
Evaluation of project to PFI
GREEN TECHNOLOGY FINANCING SCHEME (GTFS) PACKAGE GREEN TECHNOLOGY FINANCING SCHEME (GTFS) PACKAGE GREEN TECHNOLOGY FINANCING SCHEME (GTFS) PACKAGE GREEN TECHNOLOGY FINANCING SCHEME (GTFS) PACKAGE
BY MAYBANKBY MAYBANKBY MAYBANKBY MAYBANK
Feature Producers of Green
Technology
Users of Green Technology
Financing Size
Financing Tenure
Up to RM50m
Up to 15 years
Up to RM10m
Up to 10 years
Eligible Facilities All types of facilities under Conventional & Islamic
financing
Ineligible Financing Refinancing of existing credit facilities
Government Incentive /
Rebate
2% pa to borrower
Guarantee Cover 60% of financing guaranteed by Government
Guarantee Fee 0.5% pa borne by borrower
Factory Building Equipment / Systems
Margin of Financing 70% - 90% 65% - 85%
Against certified GTFS amount not total project cost
Pricing Based on Borrower Risk Rating and Facility Risk Rating
GREEN TECHNOLOGY FINANCING SCHEME (GTFS) PACKAGE GREEN TECHNOLOGY FINANCING SCHEME (GTFS) PACKAGE GREEN TECHNOLOGY FINANCING SCHEME (GTFS) PACKAGE GREEN TECHNOLOGY FINANCING SCHEME (GTFS) PACKAGE
BY MAYBANKBY MAYBANKBY MAYBANKBY MAYBANK
GTFS GTFS GTFS GTFS PACKAGE BY MAYBANK GRACE PERIODPACKAGE BY MAYBANK GRACE PERIODPACKAGE BY MAYBANK GRACE PERIODPACKAGE BY MAYBANK GRACE PERIOD
o Minimum Grace Period of 6 months to ease initial cashflow during
commissioning trial runs, technology transfer / staff training.
o Term Loan tenure is inclusive of the Grace Period
Example
TL tenure 10 years
Grace Period 6 months
No of installments (10 x 12) - 6 = 114 months
i.e to be repaid over 9 1/2 years
o Interest / Profit to be serviced monthly during the Grace Period
o Grace Period granted on a Case-to-Case basis depending on borrower’s
need
GTFS FINANCING FACILITIES GTFS FINANCING FACILITIES GTFS FINANCING FACILITIES GTFS FINANCING FACILITIES
CAPEX Financing – Term Loan
� Margin of financing from 50% to 80% against the purchase price/ costs
� Tenure from 1 to 15 years, in relation to the economic life span of the asset financed
� Shorter loan tenure for plant & machinery due to depreciating nature/ wear & tear
Working Capital
� Depends on size of business and terms of trade
� Trade Facilities tenure will be inline with the borrower’s trade cycle
Loan available in :-
� Ringgit or Foreign Currency
� Conventional or Islamic terms
GTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONS
SURVEY ON REASONS FOR REJECTION OF LOAN
APPLICATIONS BY BANKS
• The company is new and does not have sufficient expertise in managing the green project
• Concerns on market acceptance of the new green tech products, and the market size
• Green technology and products are new to Malaysia, and is considered higher risks,
unless proven otherwise
• Entrepreneur does not have sufficient knowledge about their domestic and export
markets
• Entrepreneur has not secured long term contracts, and from reputable buyers
• Company’s equity / investment in the business is small relative to the bank loan requested
� Business Model /Strong Sponsors
- Existing Operations with current revenue stream
- New Ventures
• Project is backed by strong parent / holding company in meeting costs over runs
• Project is a Joint Venture with reputable / successful overseas producers
• Buyers take position in project
GTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONS
Benefits of Strong Sponsors
� Assist Project to Take-off
� Equity capitalization facilitated (20% to 30%)
� Development activities assisted
� Provides Comfort to Lenders
� Strong partner in the project
� Inference of internal due diligence undertaken
� Demonstration of internal support
GTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONS
PROJECT FEASIBILITY & FACTORS
� Magnitude of Project
– technical & organizational capacity
– proven non-obsolete technology & main technology supplier with sound track record
– maintenance & ability of technical team
– Contractor/s completion risk
GTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONS
� Ready Market
– assured revenue streams from ready market / KYM
• Finished products have ready local / export markets
• Project comes with off take agreements with parents / major shareholders / multinational
companies
GTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONS
� Project Financial Feasibility
– start-up / installation costs
– further investment / extension of existing maintenance expenses plant which is income
generating i.e. existing cash flow is sufficient to undertake additional loan
– debt service capability / gearing
– Payback period
– Assumptions to cash flow projections
– Risks/ sensitivity analysis
GTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONSGTFS LENDING CONSIDERATIONS
En Suhaimi Othman
Regional Head, Federal Territory
03 – 2295 8969
Ms Lee Mei Ying
Jln Tun Perak/Bangsar Business Centre
03 – 2070 1886
En. Azman Md Isa
Jln P Ramlee Business Centre
03 – 2144 0213
Ms Yew Sian Young
Sentul Raya/Setapak Business Centre
03 – 4043 5307
Ms Irene Khoo Poh Chin
P.J / Sri Damansara Business Centre
03 – 7954 0108
En Johari Ismail
Shah Alam/ Klang Business Centre
03 – 5511 6948
Pn Suraya Razally
Subang / Kajang Business Centre
03 – 5631 1829
En Asnawi Baharin
Regional Head, Selangor/N/Sembilan
03 – 2295 8969
En Sufian
Seremban Business Centre
06 – 764 5060
Business Banking Contact DetailsBusiness Banking Contact DetailsBusiness Banking Contact DetailsBusiness Banking Contact Details
Mr Jeffery Choong Chee Meng
Pudu Business Centre
03 – 2141 3994
THANK YOUTHANK YOUTHANK YOUTHANK YOU