CIMB Bank Bhd and CIMB Islamic Bank Bhd have committed RM100 million in financing through the Low Carbon Transition Facility to encourage SMEs to adopt low carbon and sustainable practices for business resilience.
This facility is part of the LCTF financing scheme established by Bank Negara Malaysia (BNM) in January 2022. The LCTF, which is part of CIMB’s Commercial Banking offerings, enables businesses to access capital expenditure or working capital financing to facilitate the adoption of sustainable and low carbon practices.
These include, among others, the installation of solar power systems, the adoption of recycled or biodegradable materials, improved process efficiency to reduce waste as well as obtaining sustainability certification.
This will support their effort to transform their businesses towards low carbon and sustainable operations to increase resource efficiency and reduce environmental impact, CIMB said in a statement.
Through CIMB’s LCTF, businesses will benefit from collateral-free financing of up to RM10 million with a repayment period of up to 10 years at an interest rate of up to 5% per annum.
Victor Lee Meng Teck, CEO, Group Commercial Banking of CIMB Group said, “Sustainability is a strategic business approach to create long-term value and business resilience.
“As a purpose-driven financial institution, we are proud to support the green transition by providing businesses, including SMEs, with access to innovative sustainable financing such as LCTF.”
Through the facility, he noted that businesses will be able to reduce their environmental footprint by adopting sustainable practices such as renewable energy, energy efficiency and sustainable materials, which at the same time will help to bring down their operational costs.
“This is in line with the Malaysian government’s aspiration for the country to achieve carbon neutrality by 2050, as well as CIMB Group’s own ambition to support the low carbon economy by achieving Net Zero greenhouse gas emissions by 2050, including scope 3 financed emissions,” he added.
The LCTF, which falls under CIMB’s Green, Social, Sustainable Impact Products and Services (GSSIPS) framework, marks the latest milestone by CIMB in supporting the development of the low carbon economy.
The LCTF commitment is in addition to the RM100 million CIMB had already allocated for SME Renewable Energy Financing programme and on top of various sustainable finance commitments such as sustainability-linked financing in the effort to build a more equitable, sustainable and resilient economy.
As at January 2022, CIMB has exceeded RM1 billion in sustainability-linked financing for corporate clients, out of RM3 billion earmarked through CIMB has also been actively encouraging businesses to adopt more energy-efficient and environmentally friendly practices through programmes such as GreenBizReady.
Launched in 2021, GreenBizReady aims to help SMEs in Malaysia enhance their environmental performance and economic competitiveness with practical knowledge and tools to incorporate long-term economic, environmental and social considerations into their business.
According to CIMB, the LCTF reinforces its goal to mobilise RM30 billion in sustainable finance by 2024 under the bank’s Forward23+ strategic plan. As at end of 2021, CIMB has successfully mobilised RM25.9 billion in sustainable finance under the GSSIPS framework.
