CapitaLand secures additional sustainability-linked loans
Singapore real estate group signs sustainability-linked loans from three banks totaling S$300 million (US$220.6 million)
CapitaLand of Singapore, has signed new sustainability-linked loans from three banks totaling S$300 million (US$220.6 million), demonstrating its commitment to growing its business in a sustainable manner.
The loans include a five-year S$150 million multi-currency sustainability-linked term loan facility from Crédit Agricole Corporate and Investment Bank – the first such deal by the bank to support the real-estate sector in Asia-Pacific. With the sustainability-linked nature of the facility, which was announced on July 9, CapitaLand has the flexibility to use the loan for general corporate purposes, unlike green loans where the proceeds are applied towards the funding of specific green projects.
These efforts will be quantified and benchmarked against a rigorous set of ESG indicators agreed between CapitaLand and Crédit Agricole. CapitaLand is required to be listed in the Dow Jones Sustainability World Index (DJSI World) or Dow Jones Sustainability Asia Pacific Index (DJSI APAC) where its continued exemplary ESG efforts will lower the interest rate of the loans on a tiered basis.
Dominique Duval, head of sustainable banking in Asia-Pacific at Credit Agricole, notes the new financing transaction confirms the strong and long-term sustainability commitments of CapitaLand as well as the bank’s support of the transition to a low-carbon economy and to act as a global sustainable strong player.
In addition to Credit Agricole, the sustainability-linked loans were provided by Natixis and Societe Generale. Chua Pin, senior country manager for Singapore and head of Southeast and South Asia for Natixis Corporate & Investment Banking, says the loan facility is also the first of its kind for the bank in the real estate sector.
“We are seeing increasing appetite for sustainable lending in the corporate and finance communities, particularly from companies like CapitaLand, which are staunch in their commitment to strong ESG principles, and which believe that investing sustainably makes good business sense,” he points out.
In extending the loan to CapitaLand, Pascal Lambert, group country head for Singapore and head of Southeast Asia and India at Societe Generale, says the bank aims to support the local development of ESG-linked loans that offer corporates an innovative financing solution fully adapted to their sustainable objectives.
Through the latest sustainability-linked loans, CapitaLand group CFO Andrew Lim says the company hopes to demonstrate that financial returns can be in sync with the interests of the environment and the community. CapitaLand signed the first sustainability-linked loan in Asia’s real estate sector with DBS in October 2018 amounting to S$300 million, also for five years.
Lim adds, “After securing the first and largest sustainability-linked loan in Asia’s real estate sector last year, we are now even more convinced that good sustainability practices can reap positive tangible benefits for business. CapitaLand is delighted to have new like-minded partners on board with us on this journey to embed sustainability into our business in the long run.”
In another initiative to demonstrate its sustainability efforts, CapitaLand is partnering with Sembcorp Industries to install about 21,240 rooftop solar panels atop six CapitaLand properties by end of 2019. The installation will form the largest combined rooftop solar facility in Singapore operated by a real estate company. These solar farms can collectively generate around 10,291 megawatt-hours of energy annually.
The six CapitaLand properties where the solar panels will be installed are held under CapitaLand’s business space and industrial real estate investment trust, Ascendas Reit. The energy generated through this renewable source will significantly reduce CapitaLand’s carbon footprint. The combined rooftop solar facility will avoid over 4.3 million kg of carbon emissions each year.
These latest efforts will also bring the group closer to its new sustainability targets to generate at least 20% energy consumption from renewable energy for its enlarged global portfolio by 2025. Furthermore, there is no installation cost incurred by the group, making this initiative a good business case for sustainability.
CapitaLand group chief sustainability officer Lynette Leong says the initiative is an example that sustainability can create value-add propositions and that CapitaLand is committed to growing its business in a sustainable manner.
“Following CapitaLand’s recent integration with Ascendas-Singbridge, we can now leverage a wider network of properties to contribute meaningfully towards sustainability,” she adds. “We are also exploring the use of renewable energy certificates resulting from the excess energy generated by the solar panels installed at the six properties to offset the carbon emissions from CapitaLand’s corporate operations at its Singapore headquarters in Capital Tower and Galaxis.”
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