RHB Bank to be Malaysia's first bank in carbon emissions financing

Kuala Lumpur, 27 July 2006: RHB Bank Bhd (“RHB Bank”) will be the first bank in Malaysia to offer a complete finance package for companies that wish to sell their carbon emission rights.

The finance package is also in cooperation with JBIC (Japan Bank for International Cooperation) and JCF (Japan Carbon Finance, Ltd). Both bodies are already dealing with the trading of carbon credit in the international market. With this cooperation, RHB is also set to become a financier to international market players.

“ This new business will further boost the position of RHB in the financial market locally as well as regionally, and we must thank our strategic partner, Sumitomo Mitsui Banking Corporation, for their great efforts in preparing this scheme to us,” Chairman of RHB Bank, Datuk Azlan Zainol said.

Officials of all three parties signed a memorandum of understanding (MOU) for the cooperation today. Present to witness the signing ceremony was Dato’ Seri Paduka Rafidah Aziz, the Minister of International Trade and Industry.

Signing on behalf of JCF was its President, Mr. Hiromu Tanaka, and for JBIC was its Senior Executive Director, Mr Fumio Hoshi, while Datuk Azlan signed on behalf of RHB Bank.

Under the finance package, RHB Bank will extend loans or guarantees for companies that wish to sell their carbon emission rights to JCF or any other Japanese entity under a proposed carbon credit purchasing scheme. JBIC, on the other hand, will extend financing through RHB for those projects.

“ This cooperation agreement with JBIC and JCF will allow RHB to continue pursuing its goal to be the leader in the Malaysian banking industry,” said Datuk Azlan.

JCF’s Mr Tanaka said the choice of RHB Bank as the institution to carry out this scheme to finance carbon credit trading was based on the fact that they were JBIC’s partner. This has earned the Bank the reputation as an internationally acclaimed financial institution.

Mr Hoshi of JBIC also noted that RHB Bank already had an available customer base, which would benefit from the carbon credit trading scheme. “RHB Bank has a huge base of customers which we think will be interested in participating in such environmentally conscious activities of global standards,” he said.

He also noted that JBIC’s objective of providing financing was to show their support for the Malaysian businesses which would reduce carbon emissions and to help achieve Japan’s target to reduce greenhouse gas emissions.

The move by JBIC and JCF to team up with RHB Bank also marks a landmark effort to enhance cooperation not only between Japan and Malaysia, but also between public and private institutions. This makes RHB Bank the first private financial institution to have a tripartite memorandum of understanding to support carbon credit trading with JCF and JBIC.

JBIC, which is wholly owned by the Japanese government, is the world’s largest government financial arm. Until now, its activities have revolved around government-to-government funding and financing of development and infrastructure projects in emerging economy countries.

JCF, a private company established in 2004, is backed by world-renowned blue-chip Japanese companies such as Mitsui & Co Ltd, Sumitomo Corporation, Mitsubishi Corporation, Toyota Motor Corporation, Sony Corporation and Nippon Oil Corporation. JCF’s main business objective is to purchase carbon credits until year 2012 from Clean Development Mechanism projects.

RHB Bank, the commercial banking unit of the RHB Group of Companies, offers a wide range of corporate, commercial and consumer banking as well as treasury products and services. It offers equipment and motor vehicle financing through its Finance Division, as well as Islamic banking services through its subsidiary, RHB Islamic Bank Bhd.