DBS Loan to Spur Green Solutions in Maritime Industry

The bank has issued a sustainability-linked loan to Sembcorp Marine, which references the Singapore Overnight Rate Average.

The $500 million sustainability-linked financing facility, believed to be the industry’s first, will help steep the maritime giant to cleaner, greener and renewable energy solutions, the two sides announced in a joint statement on Thursday.

The loan’s interest rate comprises a compounded daily SORA rate calculated in arrears and an applicable margin. The loan features interest rate discounts linked to pre-determined Environmental, Social and Governance (ESG) targets, which are aligned with Sembcorp Marine’s performance targets set out in the group’s sustainability report.

The inclusion of green financing dovetails with our strategic transformation and pivot since 2015 to provide innovative engineering solutions to the global offshore & marine and energy industries, William Goh, Sembcorp Marine’s group finance director, said.

In 2019, some S$530 million of Sembcorp Marine’s projects were related to green solutions. The company has also introduced more green features in its operations, such as the use of solar energy to reduce emissions.

As a purpose-driven bank, we believe financial institutions have a strategic and pivotal role to play in proactively supporting industries’ work towards a lower-carbon future, Dorian Delteil, DBS head of oil and gas, said.

DBS recently raised its commitment to finance S$50 billion in renewable, clean energy and green projects by 2024, up from S$20 billion previously.