CapitaLand snags four-year $500m sustainability-linked loan from UOB

Developer CapitaLand has secured a four-year $500 million sustainability-linked loan from United Overseas Bank (UOB).

It is the largest sustainability-linked bilateral loan in Singapore's real estate sector, said the firm yesterday.

CapitaLand and its real estate investment trusts have raised around $2.42 billion in less than two years through sustainable financing instruments.

CapitaLand chief financial officer Andrew Lim noted that despite the economic climate, the group has raised $1.5 billion this year through sustainable finance.

Its Global Sustainability Report out yesterday noted that the group has achieved utilities cost avoidance of $208 million since 2009. This is up from the $170 million it reported last year.

CapitaLand has also achieved a 29.4 per cent reduction in carbon-emissions intensity since 2008.

It has partnered with seven financial institutions to secure 12 sustainable-funding instruments comprising sustainability-linked loans, green loans and green bonds.

The sustainability-linked loan from UOB is explicitly linked to CapitaLand's achievements as measured against a global environmental, social and governance (ESG) benchmark for real estate and infrastructure investments.

As the loan is not tied to any specific project or property, CapitaLand said it has the flexibility to use the proceeds for general corporate purposes. This is unlike green loans, where proceeds are specifically used for sustainable projects.

Group chief executive Lee Chee Koon said: "The pandemic has raised global awareness of the importance of ESG (criteria), as major disruptions to businesses can come from anywhere... We are reviewing CapitaLand's sustainability strategy... which will allow (us) to better future-proof our company."

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A version of this article appeared in the print edition of The Straits Times on May 29, 2020, with the headline CapitaLand snags four-year $500m sustainability-linked loan from UOB. Subscribe