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First green loan secured by Keppel Land for commercial development in Sino-Singapore Tianjin Eco-City

by • June 21, 2019 • Commercial Property Loan, Property Market NewsComments (0)197

Keppel Land, through a wholly-owned subsidiary of Keppel Land China, has secured its first green loan facility (Green Loan) to the amount of RMB 850 million (approximately S$ 170 million) from the HSBC Group China for the development of Seasons City (Phase 1) in the Sino-Singapore Tianjin Eco-City (Eco-City), China.

first green loan

Image credit: Enterprise Singapore

Green Loans are loan instruments made available exclusively to finance or re-finance eligible green projects. The first Green Loan for Seasons City (Phase 1), which will be on a five-year term, is to be aligned with the Green Loan Principles issued by the Loan Market Association, the Asia Pacific Loan Market Association and the Loan Syndications & Trading Association, where the project must demonstrate clear environmental benefits which can be assessed.

It is the first Green Loan granted by the HSBC Group China to support the development of a property project in Mainland China.

Mr Ben Lee, President of Keppel Land China, said, “Keppel Land China is pleased to secure our first green loan for the development of a commercial project in the Sino-Singapore Tianjin Eco-City. This reflects our focus on building environmentally-friendly and resource-efficient properties. Keppel Land is committed to ensure that all new overseas commercial projects are minimally certified to the Building and Construction Authority of Singapore’s (BCA) Green Mark GoldPlus standard, or its equivalent.”

Mr Lee added, “Keppel Land has been actively involved in the Sino-Singapore Tianjin Eco-City since the conception of the project more than a decade ago. We have actively contributed to the Eco-City’s transformation from a barren site to the sustainable city it is today. When completed, Seasons City will contribute further to the vibrancy and attractiveness of the Eco-City.”

Seasons City is part of Keppel Land’s growing commercial portfolio in China to meet the rising demand for prime office and retail space. It will feature three office towers and retail premises with a total gross floor area of about 161,800 sm. Phase 1 of Seasons City, which comprises a five-storey retail complex and a 10-storey office tower, is targeted for completion in 2020.

Phase 1 of Seasons City has been conferred BCA Green Mark Platinum Award (Provisional), the highest accolade under the BCA Green Mark scheme. The commercial development adopts energy-efficient lighting designs, chillers and ventilation systems. It also taps on non-potable water to reduce water consumption. The project has also installed a photovoltaic system and a solar hot water system to utilise solar energy. The total energy and water savings to be achieved by Seasons City (Phase 1) is estimated to be over RMB 9 million (approximately S$ 1.8 million) a year.

For its green efforts and contributions, Keppel Land China was awarded the “2018 Outstanding Green Contribution” award at the 7th China Finance Summit 2018 and the “2017 Most Responsible Brand” award at the 7th China Charity Festival 2018.

The Keppel Group leads the Singapore Consortium in the development of the Eco-City, a landmark bilateral project between the Governments of Singapore and China. Besides developing eco-friendly residential and commercial projects, several other Keppel businesses are contributing to the Eco-City’s development with solutions for sustainable urbanisation, such as water reclamation, energy and engineering services, district heating and cooling and integrated logistics distribution.

Green loans such as the first green loan obtained by Keppel Land 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”.

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