UOB launches real estate green lending framework with $140m in loans
(31 October 2019 – Singapore) UOB has provided its first green loans under its new real estate sustainable finance framework.
The two companies, Lucrum Capital and Teambuild Engineering & Construction, secured a total of $140 million in three loans to finance the construction and operation of their green buildings in Singapore.
The lending framework has been developed specifically for companies that own or manage real estate assets such as data centres, hotels, homes, restaurants, offices as well as industrial and retail spaces.
In an effort to make it easier for SMEs to apply for green financing, UOB has set out the eligibility criteria – including sustainability strategy, objectives, ratings and performance targets – for the companies to meet when applying for the green or sustainability-linked loans.
The bank will record and monitor each borrower’s management of loan proceeds and track the sustainability metrics as agreed with the company.
UOB will roll out similar lending frameworks for other sectors to receive green loans.
Private equity firm Lucrum Capital will use two of the loans to construct a six-storey hotel at 110/112 Killiney Road. The hotel's design will include climate-responsive features to help reduce its contribution to the urban heat island effect, energy-efficient air conditioning and lighting, water-efficient fittings, as well as energy and water monitoring and management systems. These green features are expected to lead to 30 percent in cost savings.
Meanwhile, Teambuild Engineering & Construction will use its term loan for its new integrated construction and prefabrication hub (ICPH). Located at 9 Defu South Street 1, the building has green walls and rooftop solar panels with a total solar capacity of 58.9 megawatt-peak. The company has also implemented an energy management system to track energy consumption.
Eric Tham, head of group commercial banking at UOB, said the lender aims to help more clients, particularly SMEs in the real estate sector, develop sustainable buildings. This will be aligned with the Building and Construction Authority's (BCA) target for 80 percent of buildings to be certified green by 2030.