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Maybank Group

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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


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


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


� 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


� 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


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