Inve$t | Market Sentiments | 17 November 2023
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According to Economy Minister Rafizi Ramli, the government wants to work with the financial sector to introduce transition financing to support Malaysia’s energy transition agenda. While the government and the banking industries have supported green projects through green financing, it does not encompass all forms of sustainable projects and there are sectors or industries or even projects that may not qualify for green financing.
Citing equipment which increases energy efficiency as an example, he said that by definition it does not qualify as a green project. However increasing energy efficiency is an integral part of energy transition. He was speaking to journalists at the ASLI Banking & Finance Summit 2023 themed ‘Future of Finance & Financing the Sustainable Development Goals’
He added that his ministry is looking at working with the banking and finance industries in order to develop another stream of financing, which can be termed as ‘transition financing’. He said that for energy transition to work and for the National Energy Transition Roadmap (NETR) to achieve its objectives, the overall ecosystem is needed. The transition financing aims to include supporting industries which contribute towards green projects and ultimately to support the country’s green ambitions.
He said that hydrogen projects will most likely not pass the standard banking evaluation in terms of returns, but if we have a 10-15 years roadmap to build a hydrogen economy, the banking industry cannot wait for everything to be ready before providing funding. The funding has to start from now and that is where the idea of transition financing has to be developed in the economy.
Through NETR, the government has allocated RM2 billion in financing for energy transition projects. His ministry will work with banks and financial institutions with the RM2 billion fund allocation and that it would need to make calculated decisions in terms of approval for project financing. It is hoped that the public funding will also be complemented by additional funding from the financial industries, to support the government’s transition initiatives. With the support of the government, there has never been a more opportune time for the banking and finance sector to act.
Sime Darby Receives Shareholder Support to Acquire UMW
Sime Darby Berhad held an EGM on Thursday November 16th, to seek its shareholders’ approval on the company’s proposal to acquire PNB’s 61.2% stake in UMW Holdings Berhad and thereafter to launch a mandatory general offer to acquire the remaining UMW shares not owned. At the EGM, shareholders voted to approve the proposed resolution which allows Sime Darby to move forward with the strategic acquisition. With shareholders’ approval secured, Sime Darby is confident of fulfilling all conditions for the deal. Following the outcome of the EGM, Sime Darby will launch an MGO to acquire the remaining UMW shares to gain full ownership of UMW.
Dato’ Jeffri Salim Davidson, Sime Darby’s Group Chief Executive Officer said, “We are delighted with the shareholder support. It shows that shareholders share our vision in growing our automotive presence in Malaysia. We appreciate our shareholders’ trust and confidence and are committed to continue delivering value for them.”
Shareholders of UMW will receive an offer document setting out details of the MGO in the coming weeks. The acquisition of the 61.2% stake in UMW is expected to be completed by the end of November 2023; whilst the MGO, assuming the acceptance period is fully extended, is expected to close in February 2024. On 24 August 2023, Sime Darby announced that it entered into a conditional share purchase agreement with PNB to acquire PNB’s 61.2% stake in UMW, a well-established conglomerate with a diverse portfolio of businesses including automotive, equipment, aerospace and manufacturing & engineering (M&E) segments.
