Alliance Islamic Bank Bhd has entered into a collaboration with Asia Carbonx Change Plt (Carbonx) to roll out an innovative green financing initiative aimed at helping small and medium-sized enterprises (SMEs) embark on a sustainable path. This new programme offers financial solutions that assist businesses in reducing their carbon emissions and advancing their sustainability agendas.
The bank’s latest offering, the Islamic Sustainability Financing Programme (ISF Programme), includes the Low Carbon Transition Facility-i, designed to provide a comprehensive range of financing options. These solutions will enable businesses to fund their transition towards greener operations, including securing Renewable Energy Certificates (RECs) as part of their efforts to lower their carbon footprints.
Carbonx will play a key role in this partnership by facilitating the acquisition of RECs for Alliance Islamic Bank’s clients who meet the criteria for solar financing. RECs confirm that a company’s electricity consumption is sourced from renewable energy, enabling them to mitigate their Scope 2 emissions, which relate to electricity purchased for internal use.
“At Alliance Islamic Bank, we are committed to building an ESG-centric organisation that supports the transition to a low-carbon economy,” said Rizal IL-Ehzan Fadil Azim, the bank’s chief executive officer. “Our partnership with Carbonx underscores our dedication to providing innovative, sustainable financial solutions that help businesses reduce their environmental impact while remaining competitive in a global economy.”
Under the scheme, businesses that select solar or energy efficiency solutions through the bank’s EPCC (engineering, procurement, construction, and commissioning) partners will qualify for RECs. In addition, companies that secure financing above RM500,000 will benefit from complimentary RECs for a period of up to two years.
This new offering enhances the bank’s green financing portfolio, which includes up to 100% financing without upfront costs, providing companies with the opportunity to monetise their renewable energy assets. By offering practical and financially attractive options, the bank aims to make the adoption of sustainable practices easier for SMEs.
This initiative supports Alliance Bank’s broader goal of generating RM15 billion in new sustainable financing by the 2027 fiscal year, part of its commitment to embedding environmental, social, and governance (ESG) values into its operations.