UOB is accelerating efforts to become a market leader in green financing by helping more businesses to further drive their sustainability strategies for the long term.
The bank has developed a comprehensive set of sustainable finance frameworks as a guide for borrowers to get green loans on projects from transportation to real estate.
These are aligned with the United Nations Sustainable Development Goals and the Singapore Green Plan 2030, and come as the country is shaping itself into a hub for such funding, said Mr Karunia Tjuradi, UOB's head of sector solutions group.
One of the goals of the Singapore Green Plan is to phase out internal combustion engine (ICE) vehicles and switch to electric vehicles (EVs), which emit half the amount of carbon dioxide, by 2040.
That has opened up new financing opportunities for banks.
Mr Bonar Silalahi, UOB's head of industrials and consumer goods, said the ecosystem for EVs is much more complex than that for regular ICE vehicles. Each brand owner has its own way of selling a car, and this will lead to more complicated financing needs for the EV industry.
Under the battery-as-a-service model, for example, EV makers allow customers to lease batteries as a separate component from the cars. There are also options where the vehicle is packaged with home EV chargers.
In Singapore, buyers can purchase the car together with the battery, or opt to set up an EV charging point at home. But moving forward, more options will be available for buyers as EVs become more affordable and the supporting infrastructure evolves.
The Land Transport Authority expects the cost of buying an EV and ICE vehicle to be similar by the mid-2020s, and has set a target of 60,000 EV charging points by 2030.
Mr Silalahi said: "With EVs, it is no longer one solution fits all, like now. This will change the way the financing of this ecosystem works. We need to evolve to meet new demand and new ways of selling by adjusting the way all this is financed."
Last month, UOB launched U-Drive, its first integrated green financing plan for the EV ecosystem in Singapore.
Brand owners launching business models such as battery-as-a-service, car dealers planning to expand inventory, or charging point operators procuring and installing infrastructure can tap these green facilities for working capital needs.
Businesses or individuals can also tap green financial solutions for their purchases of EVs and charging equipment.
UOB is pioneering the U-Drive solution with Hong Seh Evolution, authorised distributor of commercial EVs from China's Dongfeng Sokon Automobile and dealer of the Chinese-made BYD T3 electric vans in Singapore.
Aside from EV financing, the bank this month also launched financing plans for energy-efficiency projects for buildings and homes in Singapore, Malaysia, Thailand and Indonesia.
The platform - called U-Energy - will start off with nine energy service companies to help customers cut at least 20 per cent in energy consumption on average, UOB said.
The U-Energy partners can support common energy efficiency projects such as improving chiller and air-conditioning efficiency, installing solar panels on rooftops, switching to LED lights, optimising energy and power management systems, and changing the building facade to reflect direct sunlight for reduced heat absorption. The move comes at a time when electricity costs are expected to rise on higher gas prices.
Said Mr Tjuradi: "U-Energy is designed to connect various energy efficiency ecosystem players, from building owners, energy service companies to mechanical and electrical contractors."
Building owners can opt for a direct purchase of the energy-efficient equipment or systems with UOB's green financing. They can also opt for the energy-as-a-service model where the bank will provide green loans to U-Energy partners at no upfront cost to building owners.
Competition among the banks is intensifying as interest in green and sustainability-linked financing increases. UOB's local rivals, DBS Bank and OCBC Bank, are also launching financing plans tailored for EVs and other green projects.
In March, OCBC rolled out its Eco-Care car loan package at a preferential pricing of 1.68 per cent per annum for the purchase of EVs, after DBS earlier said it would offer loans at similar rates to all customers purchasing new and used electric and hybrid vehicles.
Both DBS and OCBC have also rolled out green renovation loans.
On Oct 3, Enterprise Singapore launched the Enterprise Financing Scheme-Green, under which the Government will provide a 70 per cent risk-share for loans made by participating financial institutions, including the three local banks.
The funding is for local firms that fall under several categories: project developers, system integrators, and technology and solution enablers from the sectors of clean energy, circular economy, green infrastructure and clean transportation.