CIMB Bank Berhad is committing RM100 million in financing through its Low Carbon Transition Facility to encourage businesses, including small and medium enterprises, to adopt low carbon and sustainable practices. This facility is being offered as part of the LCTF financing scheme established by Bank Negara Malaysia 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 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.
Through the facility, businesses can enjoy collateral-free financing of up to RM10 million with an affordable repayment period of up to 10 years at a low-interest rate of up to 5% per annum. Victor Lee Meng Teck, Chief Executive Officer, Group Commercial Banking of CIMB Group said, “Sustainability is a strategic business approach to create long-term value and business resilience.
Through this facility, 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 (“GHG”) emissions by 2050, including scope 3 financed emissions,” he added.
The facility, 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. This 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 (“SLF”). As of January 2022, CIMB has exceeded RM1 billion in sustainability-linked financing for corporate clients, out of RM3 billion earmarked through 2024.
CIMB has successfully mobilised RM25.9 billion in sustainable finance under the GSSIPS framework, putting CIMB firmly on track towards becoming an ASEAN sustainability leader by 2024.