UOB Malaysia has launched its Sustainable Vendor Financing Programme (SVFP) to support Malaysia’s Oil & Gas Services and Equipment (OGSE) sector in its decarbonisation and energy transition efforts.
As part of the programme’s debut, the Bank is allocating up to RM1 billion for the purpose of financing OGSE suppliers participating in PETRONAS Suppliers Support Programme (PSSP).
The SVFP comprises transition financing solutions with competitive rates tailored for OGSE companies participating in PSSP. It also includes meaningful incentives for these companies to kickstart their decarbonisation initiatives such as the adoption of renewable energy, improvement of energy efficiency, emission reduction measures and fleet electrification.
Ng Wei Wei, CEO of UOB Malaysia, said, “The launch of the Sustainable Vendor Financing Programme reflects our commitment to helping Malaysia’s OGSE sector transition towards sustainability.
“As PETRONAS is our valued partner, we are pleased to extend our support to their suppliers, which are predominantly small-and-medium-sized enterprises, to help them embark on their decarbonisation journey.
“This will also help the country’s OGSE sector stay competitive in the global value chain, with heightened expectations on ESG-related regulations being implemented across the world.”
The SVFP also introduces measures for OGSE companies to track and demonstrate progress in their sustainable practices. This includes completing capacity-building modules, establishing baseline greenhouse gas (GHG) reporting and demonstrating annual GHG reductions.
Developing relationship with PETRONAS
In 2019, UOB Malaysia worked closely with PETRONAS on a Vendor Financing Programme that provided financial certainty to OGSE suppliers, enabling these suppliers to focus on delivering their projects on-time and on-target.
The relationship is further strengthened with the newly launched SVFP that comes under UOB’s Transition Finance Framework (TFF). Developed by the bank’s Sector Solutions Group, a dedicated team of sector and sustainable finance specialists, UOB’s TFF offers a suite of banking solutions to companies across hard-to-abate sectors working on reducing their carbon emissions or developing low-carbon projects, such as biofuel refineries and carbon capture & storage initiatives.
UOB’s TFF has received a second-party opinion that verifies the framework is in line with internationally recognised climate finance principles, providing assurance of its alignment with global best practices for financing hard-to-abate sectors. With this framework, companies in the energy sector can establish resilient supply chains while meeting governance requirements.
