Sarawak Energy inks MoU on financing solutions for its contractors

Borneo Post – Sarawak Edition

7 November 2019

Sarawak Energy inks MoU on financing solutions for its contractors

KUCHING: Sarawak Energy recently entered into a memorandum of understanding (MoU) with Bank Islam and Syarikat Jaminan Pembiayaan Perniagaan (SJPP).

SJPP is a wholly-owned agency of the Ministry of Finance which provides financing solutions for local contractors under the energy developer and power utility’s Vendor Financing Programme.

The tri-party MoU will focus on strengthening local contractors’ financial capacity by providing better access to financing facilities.

“Financial support from Bank Islam will improve contractors’ working capital and cash flow for more to be eligible to participate in the procurement of Sarawak Energy’s infrastructure development projects,” said a press release by Sarawak Energy.

Sarawak Energy’s Chief Operating Officer, Lu Yew Hung signed on behalf of Sarawak Energy while head of Commercial Banking Ahmad Haliman Abdul Halim signed on behalf of Bank Islam. SJPP was represented by its General Manager, Azlan Mohd Agel.

The signing ceremony was witnessed by Bank Islam East Malaysia Regional Head Abdul Malek Abdullah, SJPP Senior General Manager Juanita Rusmini Abdul Jalil, Sarawak Energy Senior Vice President for Contracts and Procurement, Sulaiman Abdul Hamid, General Manager (Legal) Stephanie Gae Chin and other members of Senior Management.

The collaboration will leverage on SJPP’s Government Guarantee Schemes to provide credit guarantee to eligible contractors who require alternative solution to meet the collateral requirement.

“With the facilities in place to reduce their financial burden, more Small Medium Enterprises (SMEs) will have the opportunity to tender for larger-scale projects,” said Lu during the signing, adding that contractors’ strong financial standing is a crucial consideration factor during procurement assessments.

He also shared that since the rollout of the financial facilities two months ago, two of their contractors have been granted the facilities.

Acknowledging the significance of the collaboration, Ahmad Haliman said that the bank is proud to partner with Sarawak Energy and SJPP to provide innovative financing solutions to assist contractors in meeting their project delivery timeline.

“In supporting Sarawak Energy’s Vendor Financing Programme, Bank Islam has allocated RM300 million under this programme to assist vendors with small contracts to gain access to financing that will help them execute projects awarded by Sarawak Energy or its subsidiaries according to schedules,” he said.

Bank Islam and SJPP also expressed their excitement to help SMEs bridge their funding and collateral gaps, in support of Sarawak Energy’s initiatives to encourage more local participation in the integrated power utility’s contract and procurement activities.