ING joint green loan coordinator in Singapore’s first syndicated secured green loan
ING has acted as the joint green loan coordinator of the newly announced SGD 1.2 billion term loan to an indirect wholly-owned subsidiary of Frasers Property Limited. The net proceeds of this loan will be used to refinance existing loans relating to the development of Frasers Tower, a new 38-storey premium office and retail development.
Frasers Tower has received the Singapore Building and Construction Authority (BCA) Green Mark 1) Platinum Award, in recognition of its environment-friendly features 2).
ING first approached Frasers Property with the idea of structuring a green loan for Frasers Tower in April 2018. Subsequently, ING was mandated by Frasers Property as a joint green loan coordinator to establish a Green Loan Framework, which now forms the foundation for this green loan.
Under this Green Loan Framework, the net proceeds of green loans would finance or refinance projects that meet the eligibility criteria set for green commercial buildings which is benchmarked to the BCA Green Mark. The Framework provides clear guidance on how Frasers Property will evaluate and select eligible green projects and manage the net proceeds from the green loans. Under the Framework, Frasers Property will aim to report on the manner in which the net proceeds of the green loans are allocated and the impact of the green loans.
This is the first syndicated secured green loan in Southeast Asia under the Green Loan Principles (GLP) 3), which were introduced by the Loan Market Association and Asia Pacific Loan Market Association in March 2018.
“This loan is a great example of our constant efforts to make our portfolio more sustainable across all industry sectors, including real estate. I am proud that following the establishment of the GLP, we have now completed ING’s first green loan in the real estate sector here in Asia Pacific,” said Gerrit Stoelinga, regional head of ING Wholesale Banking Asia Pacific.
“ING is honoured to support Frasers Property in structuring its first syndicated secured green loan under the GLP, which is also the first such loan for financing a sustainable building in Singapore. With the rising interest in sustainability among real estate investors, tenants and regulatory bodies, there is room for more green loans within the real estate sector in this region,” said Robert Scholten, head of real estate at ING Wholesale Banking Asia Pacific.
ING is committed to financing the transition to a more sustainable real estate portfolio. For instance, to date, 44% of ING’s domestic commercial real estate portfolio in the Netherlands is classified as green. ING will look to continue to support its clients as it targets to have a 100% green commercial real estate loan book in the Netherlands by 2023. This demand for a more sustainable real estate portfolio is now progressing from Europe to Asia, with more clients keen on embedding sustainability into their business.
ING also announced on 14 September 2018, that it will begin steering its EUR 500 billion global lending portfolio towards meeting the Paris Agreement’s well-below two-degree goal. The bank will be using the Terra approach, which looks at the technology shift needed across certain sectors to transit to a low-carbon economy. ING is the first global bank to commit to using science-based scenarios to steer its business strategy.
1) The Building and Construction Authority (BCA) is an agency under the Ministry of National Development in Singapore. The BCA Green Mark is a green building rating system to evaluate a building for its environmental design and performance. For more information, visit www.bca.gov.sg.
2) Some environment-friendly features of Frasers Tower include lush greenery that is irrigated by recycled water, direct underground access to Tanjong Pagar MRT Station and secured bicycle parking lots with end-of-trip facilities to encourage green commuting, as well as the use of systems that optimise water and energy efficiency and improve indoor air quality.
3) The Green Loan Principles aim to create a high-level framework of market standards and guidelines, providing a consistent methodology for use across the wholesale green loan market, whilst allowing the loan product to retain its flexibility, and preserving the integrity of the green loan market while it develops. For more information, visit www.lma.eu.com.
Image: © Frasers Property Limited