Such financing are also in line with ethical and responsible financing principles, that contribute towards the long-term sustainability of this business. Governments around the world are also playing a critical role in catalysing sustainable development, through policies and regulations that encourage the adoption of green  BIS central bankers’ speeches  1  solutions. South Korea, for example, has adopted a shared vision for green growth and established the Green Growth Institute to implement efforts to deal with climate change and resolve environmental and energy issues. The Philippines introduced new legislation on climate change and established a Climate Change Commission to coordinate, monitor and evaluate the government’s actions to mitigate and adapt to the effects of climate change. In Malaysia, sustainability represents one of the key principles underpinning the New Economic Model and has been identified as a Key Strategic Reform Initiative which has led to the establishment of key agencies such as Malaysian Green Technology Corporation (MGTC) and Sustainable Energy Development Authority (SEDA). In the foreseeable future, green technology will be a driver to promote sustainable growth and development. It is in the financial industry’s interest to be involved and engaged in its rapid development. The Government has put in place, the necessary support, incentives and infrastructure. Therefore the banking industry must reciprocate in kind, by allocating more resources and putting in place the required ecosystem to expand financing into this exciting new era of new financing.

Taking into considerations the two points I earlier raised, Bank Negara Malaysia has worked closely with the Ministry of Finance and the Ministry of Energy, Green Technology and Water to establish the Green Technology Financing Scheme (GTFS), a framework designed to improve the preconditions for financial institutions to finance viable and innovative green technology companies. This is achieved through arrangements that help to bridge information gaps between financiers and businesses. These arrangements also involves credit enhancements and financial incentives, to address current market short comings in meeting a legitimate economic need. Also critically important are efforts being pursued to strengthen the capacity of financial institutions, to provide continuing advisory support to businesses that are mutually beneficial to both business ventures and financial institutions. Central to this effort is the certification process to verify that businesses which qualify for the GTFS are not only able to demonstrate the required technical capabilities, but are also commercially viable. Other complementary efforts include education and awareness programmes, organised around the country to inform and update, financial professionals as well as businesses on the latest developments in the green technology sector. Likewise, courses offered by IBBM are designed to equip finance professionals to effectively assess the viability and risk of green technology projects. In 2010, a Joint Action Committee comprising of government agencies and financial institutions was formed to provide an efficient and coordinated platform to tackle implementation issues, such as, on the compliance and monitoring processes of green projects financed under the GTFS.