Financial Institutions Support
Policy measure

According to van den Akker (2008), the Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP) was initiated by the Government of Malaysia in 1999 to improve energy efficiency in Malaysia’s industrial sector. The implementing agency of the project was the United Nations Development Program (UNDP) on behalf of the Global Environment Facility (GEF). The Pusat Tenaga Malaysia (PTM, Energy Centre) was appointed by the Ministry of Energy, Water and Communications (MEWC) to implement the project on its behalf. Funding and support for the programme is provided by the GEF, UNDP, the Government of Malaysia and the private sector.

Component 8 of the MIEEIP, the Financial Institutions Support component, aims to “Establish financing arrangements for provision of loans to eligible companies and equipment manufacturers who can host energy efficient technology demo projects and produce energy-efficient industrial equipment.” (van den Akker, 2008).

In total, USD 49,842 was spent on Component 8 (van den Akker, 2008).

The major activities in Component 8 involve (van den Akker, 2008):
  • Setting up financing arrangements: instituted project lending schemes with MIDF; selection of companies for demonstration project components and local manufacturers support programmes.
  • Monitoring of loan scheme: implementation and monitoring of loan scheme. Three companies have started paying back the amortization of their loans.

The project’s Energy Efficiency Lending Schemes (EEPLS) are as follows (van den Akker, 2008):

  • Fast-Track Approach: An ESCO is selected to work closely with a selected host demonstration company, under an energy performance contract. Maximum loan eligible for an ESCO is 90 percent of the energy efficiency project cost or not more than RM 2 million, whichever is lower.

  • Normal Approach: The Government of Malaysia- Pusat Tenaga Malaysia (PTM) works closely with the selected host demonstration companies. A fund of RM 8 million is established in the Malaysian Industrial Development Finance (MIDF), where each factory can borrow up to 50 percent of the energy efficiency investment, or a maximum of RM 2 million. Four of the originally eight demonstration projects were designed to be under the normal approach.”

No identified challenges.

Under the ‘Fast-Track Approach’, four projects were originally planned but only one, the ESCO Mensilin Holding, has been successful. Three other projects were eventually cancelled (van den Akker, 2008).

According to van den Akker (2008), “medium-sized companies have [in general] taken advantage of the funding schemes. Large companies (many energy-intensive industries are subsidiary of multinational companies) have their own financial resources, while for small companies the loan amount may have been too high.”


van den Akker, J., 2008. Malaysian Industrial Energy Efficiency Improvement Project (MIEEIP): Final Evaluation. Available at: