, Singapore

UOB issues $140m of maiden green loans

It will be used to build a hotel and a construction and prefabrication hub.

United Overseas Bank (UOB) has extended its first green loans to Lucrum Capital and Teambuild Engineering & Construction, which together secured $140m to finance the construction and operation of green buildings in Singapore, an announcement revealed.

Lucrum Capital will use two green loans under the UOB Real Estate Sustainable Finance Framework for the construction of a six-storey hotel at 110/112 Killiney Road. The building’s design will include climate-responsive features, and are expected to lead to 30% in cost savings.

Meanwhile, Teambuild Engineering & Construction will its green term loan for its new integrated construction and prefabrication hub (ICPH) at 9 Defu South Street 1. The building will be equipped with green walls and rooftop solar panels with a total solar capacity of 58.9 megawatt-peak.

The loan was extended under UOB’s Real Estate Sustainable Finance Framework, the first lending framework for the sector established by a Singapore bank, according to UOB.

The financing framework sets out the eligibility criteria, including sustainability strategy, objectives, ratings and performance targets, for companies to meet when applying for green loans or sustainability-linked loans. Under the framework, UOB will record and monitor the borrower’s management of loan proceeds, as well as track the sustainability metrics as agreed with the company.

The Building Construction Authority (BCA) has earlier set a target for 80% of buildings to be certified green by 2030.

KPMG in Singapore advised UOB in the development of the UOB Real Estate Sustainable Finance Framework, which is in line with the Green Loan Principles and the Sustainability Linked Loan Principles issued by the Loan Market Association in 2018 and 2019, respectively.
 

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