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First green loan for EC development secured by Frasers Property

by • June 10, 2020 • Green loanComments (0)143

Frasers Property secures Singapore’s first green loan for an Executive Condominium development

first green loanFrasers Property Limited (“Frasers Property”, and together with its subsidiaries, the “Group”) today announced that it has, through its subsidiary, Fernvale Lane Pte. Ltd., secured a S$350 million green loan under the LMA/APLMA Green Loan Principles to finance its Fernvale Lane Executive Condominium (“EC”) development (“Fernvale Lane Green Loan”).

“Green Loan Principles” means the “Green Loan Principles” originally dated 21 March 2018 with the latest update in May 2020 issued by the Loan Market Association (“LMA”) and Asia Pacific Loan Market Association (“APLMA”). The Green Loan Principles set out a clear framework to promote integrity in the development of the green loan market by clarifying the characteristics of a green loan, based around the following four core components:

  • Use of Proceeds
  • Project Selection and Evaluation
  • Management of Proceeds
  • Reporting

This will be Singapore’s first green loan for an EC development, and the Group’s 10th green financing initiative.

Mr Loo Choo Leong, Group Chief Financial Officer of Frasers Property, commented, “Our Group is a key participant in the fast-evolving green financing market in the region because we have been quick to recognise the support from financial institutions for green financing. Including this latest green loan, as a Group, we have raised around S$4 billion in green financing to date. This includes gross funds raised by the Group’s joint ventures and REITs.

Tapping the green loan market is not only an integral part of our capital management strategy, but a natural extension of its business focus on sustainability, and we intend to keep adding to Frasers Property’s track record of raising green financing.”

Fernvale Lane Pte. Ltd. is 80% held by a wholly-owned subsidiary of Frasers Property and 20% held by CSC Land Group (Singapore) Pte. Ltd.. CSC Land Group (Singapore) Pte. Ltd. is the development arm and a wholly-owned subsidiary of China Construction (South Pacific) Development Co. Pte. Ltd. The latter is the regional subsidiary of China State Construction Engineering Corporation (CSCEC), the world’s largest investment and construction conglomerate (as stated on the corporate website of CSCEC).

Fernvale Lane Pte. Ltd. will develop an EC with approximately 500 units at the Fernvale Lane site, which the Group won in a Government Land Sale exercise in March 2020. On completion, the development is targeted to obtain BCA Green Mark GoldPLUS, adding to its appeal to first-time homebuyers and upgraders. The site has attractive locational attributes, including its proximity to amenities, the Seletar Aerospace Hub and the upcoming Punggol Digital District, on top of easy access to the CTE and key transportation nodes.

Fernvale Lane Green Loan is the Group’s 10th green financing initiative. The Group raised its first green loan financing, which was also Singapore’s and Southeast Asia’s first syndicated green loan, in September 2018 for the refinancing of Frasers Tower. The Group subsequently secured the first corporate syndicated green loan in Australia as well as Singapore’s first green loan with pricing structure linked to BCA Green Mark.

The BCA is an agency under the Ministry of National Development, championing the development of an excellent built environment for Singapore. The BCA Green Mark is a green building rating system to evaluate a building for its environmental impact and performance. It provides a comprehensive framework for assessing the overall environmental performance of new and existing buildings to promote sustainable design, construction and operations practices in buildings.

Mr Paul Ho, chief mortgage officer at iCompareLoan, in congratulating Frasers Property for securing the first green loan for EC development, said, “Developers usually cannot access green funds because they are unfamiliar with the framework and also don’t have the time to research the requirements. This prevents the, from shifting to greener business practices.

Green loans such as the first green loan obtained for EC development obtained by Frasers Property are aimed at advancing environmental sustainability and until quite recently came under the umbrella of Green Bond Principles.

They now have their own guidelines known as Green Loan Principles (GLP). The green loan market aims to facilitate and support environmentally sustainable economic activity. GLP have been developed by an experienced working party, consisting of representatives from leading financial institutions active in the syndicated loan market, with a view to promoting the development and integrity of the green loan product.

The green loan market aims to facilitate and support environmentally sustainable economic activity. The GLP have been developed by an experienced working party, consisting of representatives from leading financial institutions active in the syndicated loan market, with a view to promoting the development and integrity of the green loan product.

Their aim is to create a high-level framework of market standards and guidelines, providing a consistent methodology for use across the green loan market, whilst allowing the loan product to retain its flexibility, and preserving the integrity of the green loan market while it develops.

The GLP comprise voluntary recommended guidelines, to be applied by market participants on a deal-by-deal basis depending on the underlying characteristics of the transaction, that seek to promote integrity in the development of the green loan market by clarifying the instances in which a loan may be categorised as “green”.

Speak to a loan consultant if you want to find out about securing green loans

If you want to explore getting a green loans, you should speak with a trusted loan consultant as they can set you up on a path where can get you a commercial loan in a quick and seamless manner.

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