Benchmarking  
  Audit  
  Energy Rating  
  Promotion  
  ESCO Support  
  Demonstration
Projects 		 
  Local Equipment Manufacturers  
  EE Financing  
 
 


Energy efficient technologies usually come with a high price tag, and industries are often reluctant to invest in activities that do not have visible benefits to the productivity or profit levels. Besides, factories tend not to prioritise energy efficiency because of the relatively low price of energy.

The lack of participation from the local financial institutions in EE projects stems from their lack of awareness about the potential benefits of such ventures. Those who have been approached in the past by potential borrowers (ESCOs and industrial firms) were not convinced that the proposed projects are bankable or feasible. They view EE projects as high-risk and low-return ventures.

While the national energy policy provides a clear direction for energy-related activities in Malaysia, the absence of a comprehensive legal and regulatory framework will delay the effective and sustainable implementation of EE projects. Specifically, the conventional financial loans are not viable for EE projects because of the government subsidy of energy price, which is aimed at creating a business- and investment-friendly environment.


To remove these barriers, a number of efforts were carried out, such as roadshows on the need for a special scheme to cater for EE projects for selected financial institutions and forums to address the roles and opportunities for the financial sector in EE projects.

The main objective of this component was to assist in the implementation of Components 6 and 7 in the financing aspects of the activities to:
 
   
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Host energy efficiency technology demonstration programmes and design applications (Component 6)
 
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Produce locally energy efficient equipment for technology demonstration projects (Component 7)
 
   

EE Project Loan Financing Scheme
It is generally assumed that industries would require external financial assistance when implementing EE activities. This is mainly because energy efficiency is not the core business of the factory or company, and the management would prioritise production over energy efficiency when deciding on investments.

For the MIEEIP, an EE project loan financing scheme of RM 16 million has been setup at the Malaysian Industrial Development Finance Bhd (MIDF). As fund managers, MIDF has disburse loans for several demonstration projects. The allocations are made available by the Global Environment Facilities (GEF) and the Malaysian Electric Supply Industry Trust Account (MESITA)


MIDF has also agreed to be the fund manager for projects involving local manufacturers of energy efficient equipment.