Green Equity Financing Model for Malaysian Solar Farming in Supporting Responsible Investment: A Conceptual Study (International Journal of Research and Innovation in Social Science)

Summary

• The permissible fundraising limit for Equity Crowdfunding (ECF) in Malaysia has increased from MYR 5 million to MYR 10 million.p.3
• The systematic literature review retained 62 studies and policy documents for synthesis, including 43 peer-reviewed journal articles and 12 policy reports.p.5
• In the US, Solar Mosaic enabled retail investors to participate in solar financing from as low as USD 25 via standardized notes, yielding predictable returns of approximately 4.5%.p.6
• Abundance Investment in the UK raised £700,000 in 35 days by offering long-term debentures with fixed returns of 7–8%.p.6
• Japan's community solar initiatives mobilized citizen capital through fixed-return bonds, including funds raising ¥141M and ¥201M.p.6
• Malaysia's co-investment fund (MyCIF) supports ECF and P2P campaigns, originally matching private investments at a 1:4 ratio before adjusting to 1:2 during the COVID-19 pandemic.p.3

Key insights

1. Small-scale renewable energy developers struggle to secure traditional financing due to high perceived risks, limited credit histories, and lack of collateral.p.1
2. Existing Malaysian renewable energy schemes like NEM, LSS, and GTFS 4.0 primarily benefit large-scale institutional players, leaving smaller solar projects excluded.p.3
3. Meta-analyses demonstrate that high-ESG portfolios generally exhibit lower volatility, reduced downside risk, and equal or superior long-term returns compared to conventional investments.p.3
4. Current Malaysian ECF regulations and platform practices lack systematic ESG screening as a prerequisite for project listing.p.7
5. A conceptual Green Equity Financing Model embeds ESG screening ex-ante to ensure sustainability compliance prior to campaign launch and capital disbursement.p.9
6. The process model releases raised funds in milestone-based tranches tied directly to project progress and ongoing ESG metrics.p.9
7. Equity crowdfunding platforms face non-financial risks such as cybersecurity threats, potential scams, and technical grid connection challenges.p.10