2  BIS central bankers’ speeches  As a result of these holistic efforts, green technology financing is beginning to gain traction amongst financial institutions. To date, the GTFS has supported RM805.5 million in financing to 65 companies, operating in a broad range of green technology sub-sectors which encompasses energy, buildings, transportation and water and waste management, reflecting a year-on-year growth rate of 130% in terms of total financing and 171% in terms of companies assisted. While still small in aggregate terms, the value accumulated by participating financial institutions in terms of greater familiarity with green technology applications, and their potential and success factors for commercialisation is an important ingredient in positioning financial institutions to further expand financing into this new and increasingly important area of growth. Therefore, the financial industry needs to do more. Opportunities moving forward Moving forward, the finance industry’s ability to leverage on the opportunities in green technology financing will determine the pace of growth in the green technology sector in Malaysia. The SME Masterplan 2012–2020 has identified potential areas such as solar power and energy efficiency products as well as other related services such as design and consulting of green solutions that could facilitate SMEs to move up the value chain. This is expected to contribute towards achieving the targets set under the SME Masterplan, where SMEs contribute 41% of GDP, 62% of total employment and 25% of total exports by 2020.

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.