Muhammad bin Ibrahim: Role and opportunities of the financial system in supporting green technology Welcoming remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the Green Technology Financing Bankers’ Conference, hosted by the Central Bank of Malaysia and the Institute of Bankers Malaysia (IBBM), Kuala Lumpur, 2 October 2012. *  *  *  Ladies and gentlemen, distinguished guests, Introduction I am pleased to welcome you today to the Green Technology Financing Conference jointly hosted by Bank Negara Malaysia and the Institute of Bankers Malaysia (IBBM). This conference is timely and provides the industry with valuable opportunities to stay abreast with key developments in green technology financing and discuss transformative solutions to grow this new era of financing in a sustainable manner. My remarks today will hence focus on how the financial system can play a catalysing role in the development of a vibrant and dynamic green technology financing ecosystem, and to continuously support the needs of the economy in becoming a high value added high income economy by 2020. The world’s ecosystem is experiencing growing risks of climate change, resource depletion and environment degradation which have far reaching and irreversible ramifications for societies and economies. In the past 100 years, the global temperature has risen by 0.74°C as carbon dioxide intensity has increased largely due to increasing use of fossil fuels. More than 80% of our energy needs are currently derived from fossil fuels, exerting a huge burden on this non-renewable resource.

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.