Frequently Asked Questions
Frequently Asked Questions on the Green Technology Financing Scheme (GTFS)
All SREP developer who interested to apply for GTFS, have to make sure that prior for any submission to GreenTech Malaysia approval from the SCORE or any equivalent document is already secured. Failing which the GreenTech Malaysia will consider the submission is in complete.
All cost component which fall under Green Technology criteria is allowable to get financing under GTFS. However, as for purchase of raw materials, it may not be eligible as the financing needs to be project based. Nevertheless, if the applicant can justify that the raw material can be project linked (i.e. purchase of empty fruit bunch for biomass power plant, purchase of solar panels for construction of building etc) then it is permitted.
Financing the existing/commissioned project is allowable under GTFS with condition the financing is not for the existing property, plant & equipment (PPE) (refinancing) but the financing is for the new PPE that use for retrofitting/improvement to the existing facility or plant.
No, GTFS can only finance project which ready for commercialization.
No, the Certificate if not transferable, should there is any changes in company ownership or management or changes in company name (during certificate validation period), the Green Certificate legality will be automatically void. The new company have to reapply to GreenTech Malaysia should they interested to continue with the GT project.
GTFS is a soft loan supported by government; the treatment is similar like normal loan, where the borrower has to pay the installment to bank through out the tenure period.
Application is rejected if applicant fails to satisfy any of the following;
- Application Form contains fraud information.
- Information or data provided unable to support application (e.g. Project has no significant impact (item B.9), Item D.1: difficult to measure outcome therefore monitoring and verification is not possible).
- Supporting documents are not sufficient (e.g. no SCORE approval in the case of SREP project, tenancy agreement, sale and purchase agreement etc.).
- No feedback received from applicant (i.e. explanation / additional information) within 3 working days during evaluation process for further project clarification.
Application is considered in-complete if applicant fails to satisfy any of the followings;
- Application Form is not sufficiently filled-up.
- Information or data provided are wrong or wrongly supplied (e.g. Outcome in item B.9 are not clear, Item D.1 are not clearly explained how to monitor or measure the impact).
- Information are invalid or not applicable (e.g. Fuel supply agreement not valid, tenancy agreement not signed etc.).
- Supporting documents are not sent or insufficient (e.g. no supporting document to technology partner, calculation for item B.9 not supplied, etc).
The GTFS is a special financing scheme introduced by the government to support the development of Green Technology (GT) in Malaysia. It was announced by the Prime Minister in the Budget 2010 presentation with a total financing scheme amounting to RM1.5 billion.
Besides this financing scheme, during the 2010 Budget Announcement, the government had also appointed GreenTech Malaysia as the focal point to set standards and promote green technology projects. Several programmes will be introduced, that include the following:
- An International exhibition will be conducted in October 2010 to attract internationally renowned companies and experts in GT
- Develop Putrajaya and Cyberjaya as pioneer green townships
- Introduction of green technology standards for government procurement
- Tax exemption in obtaining Green Building Index (GBI) certificates
Under the GT policy which was launched on 24 July 2009, it has been clearly defined that any product, equipment or system which satisfies the following criteria is categorized as a GT project;
- Minimises the degradation of the environtment
- Reduces the greenhouse gas emissions
- Safe for use and promotes a healthy and improved environment for all forms of life
- Conserves the use of energy and natural resources and;
- Promotes the use of renewable resources
For further detail information on the project criteria please refer to GTFS operational & guidelines.
The four key sectors are:
- Energy
- Water and waste management
- Buildings
- Transport.
The types of projects eligible for GTFS can include (but not limited to) the following:
Energy sector
Energy supply sector
Power generation and energy supply side management including co-generation by the industrial and commercial sectors
Energy utilization sector
Energy utilization sector and demand side management programmes
Building sector
Construction, management, maintenance and demolition of building
Water and waste management sector
Management and utilization of water resources, wastewater treatment, solid wastes and sanitary landfills
Transportation sector
Public transportation infrastructure, “green” vehicles, and biofuels.
For further detail information on the type of projects please refer to GTFS operational & guidelines.
Yes, because both of these projects support the GT policy objectives.
This scheme is only eligible for new project, retrofitting or expansion that incorporates GT elements which have not been funded and / or partly funded. The GTFS will not accept applications for projects which are already underway, in construction phase (physical progress) or which have already been completed / commissioning.
All companies from the user and producer sides that are interested in developing GT projects are welcomed.
Yes, they can apply up to their maximum amount eligible.
No, because the scheme is developed in package. Furthermore, without the guarantee the project risk might increase, which result to rejection by Financial institutions.
The GTFS operates via e-application. Applicant have to at www.gtfs.my and fill in the E-application form and submit their application on-line. The e-application will commence on 1st January 2010.
Yes, the guidelines or handbook of the GTFS or GTFS Procedure and Guidelines are accessible at www.gtfs.my.
As PTHN is appointed by the government to be the focal point for GT projects, it will also monitor those projects.
A. Application Process
1. Project Certification (Technical)
All application shall be submitted to Pusat Tenaga Malaysia (PTM). PTM will process upon receive of complete and valid application.
PTM will issue notification letter of to the successful and non successful applicant. Successful applicant will receive Project Certificate.
Applicant shall furnish explanation or additional information during the evaluation period that are necessary to support the application within 3 working days.
2. Financing Application
Succesful applicant shall be able to submit financing application with Project Certificate and its relevant documents to any participating financial institutions. All applicants should follow and comply with the procedures and guidelines of the respective financial institutions. The respective Financial Institutions will issue a Letter of Offer (LO) to successful applicant. The government will bare 2% of the total interest rate or profit.
3. Guarantee Approval
Credit Guarantee Corporation Malaysia Berhad (CGC) will provide a guarantee of 60% on the financing amount. Upon guarantee approval, the CGC will issue a Letter of Guarantee to Applicant and guarantee fee of 0.5% per annum to total guarantee applies. Copy of the letter will be send to the respective Financial Institutions and PTM.
B. Financing Execution
4. Agreement and Documentation
Upon receipt of the acceptance of Letter of Guarantee by the CGC, the respective Financial Institutions will proceed with financing agreement
5. Fund Disbursement
Fund disbursement of Financing will follow the respective financial institutions procedures.
C. Project Outcome
6. Project Monitoring and Verification
Applicant shall submit Project Progress Report to PTM during project implementation. Upon commissioning, applicant shall submit Project Outcome Report every three month to PTM with format and period specified by PTM.
7. Project Impact
Upon completion of Project Monitoring and Verification, applicant shall submit project Impact study with format specified by PTM.
For further detail information please refer to GTFS operational & guidelines.
No, as the GT is one of the promoted projects by government.
The interest rate charged is determined by the participating financial institutions. The Government will bear 2 % of the total interest/profit.
The other benefits that can be obtained are as follows:
- Interest subsidies of 2% from the total interest rate charged.
- Government guarantee of 60% from the total approved loan.
- Training will be provided to the applicants in enhancing knowledge on GT.
Applications are opened from 1 January 2010 for a period of 3 years or upon complete utilization of the RM1.5 billion loan, whichever is earlier.
The technical evaluation process will take about 21 working days starting from the received of complete and valid application by PTM until the issuance of the letter of Project Certificate by PTM. While the financing process (financing and guarantee) will take 30-60 working days subject to the completion of financing application requirements.
The margin of financing will be decided by the participating Financial institutions, however the maximum financing offered to the producer companies is up to RM 50 million and RM 10 million for user companies.
The security and collateral of the financing depends on the requirement of the participating Financial Institutions.
Yes, PTM will set up a call center that will provide assistance in GTFS-related matters. We can be reach through our hot line at 1-800-88-4837.
The documents required are as follows:
- Memorandum & Articles of Association of Applicant
- Attachment - certified copy of Form 9, 24, 49
- Collaboration / joint venture agreement with other project partner(s), authorisation letter from technology provider
- Approved layout drawing indicating the project boundary
- Project Management Team structure
- Team member CV, employment contract or latest EPF receipts as evidence of employment
- Technology full specification, track record, relevant approved engineering drawings etc.
- Project implementation schedule and key milestones (if indicated in separate sheet)
- Please provide necessary approval document (if required for project implementation)
- i.e. Environment Impact Assessment,
- Sales and Purchase Agreement,
- Tenancy Agreement, Development order,
- Safety, Fuel Supply Agreement etc.
- Calculation of project outcome
- Soft Copy of the spreadsheet for calculation of cash flow and IRR (with relevant supporting document)
- Relevant approved drawings to support explanation
No. However, the following are eligible:
- Producer company: Legally registered Malaysian-owned companies (at least 51%) in all economic sectors
- User company: Legally registered Malaysian-owned companies (at least 70%) in all economic sectors
Financing tenure under this scheme will be 10 years for User of GT and 15 years for Producer of GT.
Yes, they can apply up to their maximum amount eligible.
Yes, they are the user of GT.
