DBS has issued a S$250 million ($180 million) three-year loan to real estate group City Developments Limited with interest rate discounts linked to the firm’s sustainability-related performance.
The loan will be used for general working capital and corporate funding focused on improving CDL’s property quality, performance and method of building.
Interest rate discounts can be achieved by CDL when it achieves mutually agreed on sustainability-related performance targets including innovations that contribute to the United Nations «Sustainable Development Goals» as determined by an independently appointed expert panel. CDL must also remain listed on at least one «leading global sustainability index.»
The CDL loan is part of DBS’s ongoing efforts to promote the UN SDGs with this loan aiming to tackle three of the goals: industry, innovation and infrastructure; sustainable cities and communities; and climate action. Elsewhere, DBS has poured S$6.9 billion ($5 billion) into diverse sustainable financing in the last two years to more resource-efficient firms and green industries such as green real estate development and renewable energy.
DBS and CDL’s move is aligned with ongoing efforts by Singapore’s government to promote sustainability, including in green property development.
The green financing initiative is a commendable effort given the increasing need to build more environmentally friendly buildings and infrastructure to mitigate the impact of climate change, said Tai Lee Siang, executive director of BuildSG at the Building and Construction Authority.
In addition to DBS’s loan requirements, CDL itself also pledged commitment to sustainability by achieving «an average of two innovations or new technology adoptions» per year by 2030.