Coinciding with the global observance of Earth Day, Singapore companies have brought out sustainable finance initiatives.
Singtel, Wilmar International and Singapore Power Group (SP Group) made announcements to energize the provision of green financing and sustainability-linked loans. These loans aim to support the finance projects aligned with environmental, social and governance (ESG) standards and clean sectors.
A subsidiary of Singtel launched its first sustainability-linked revolving credit facility of $750 million. This is the largest Singapore-dollar denominated sustainability-linked loan till now. This loan allows an account holder to borrow money repeatedly until his/her loan reaches a set limit while repaying in instalments.
DBS, OCBC and UOB have teamed up to provide this credit facility to deploy this financing project. To be more precise, these banks will offer three-year loans that include interest rate discounts pegged to predetermined environmental, social and governance (ESG) targets in areas such as climate risk, carbon management, and workplace health and safety metrics. The loan is guaranteed by Singtel and will be used for general corporate purposes.
SP Group has launched a green financing project which obtained green loan facilities from DBS, OCBC and UOB. This collaboration has marked their effort for the integration of sustainability into financing strategy. Via this project, green financing instruments will be issued to finance or refinance eligible green projects, such as clean transportation, energy efficiency, renewable energy and green buildings.
Wilmar has announced closing the deal of a two-year US$100 million sustainability-linked facility with financial services company Credit Agricole CIB. Furthermore, the company also added that the margin of the facility would depend on its performance of sustainability-linked key performance indicators (KPIs).
The facility incorporates a tiered discount mechanism where the achievement of each KPI is given a specified discount, and the margin will be reduced by the aggregate of the discounts applicable for the KPI(s) achieved. Some of these KPIs include Wilmar’s continued inclusion in the Dow Jones Sustainability Index (DJSI) Asia Pacific, achievements or improvements in benchmark rating by independent organizations and traceability targets.
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