Tiong Seng lands S$125 million in green loans

OCBC, DBS, UOB and Citibank ATMs at Tang Plaza in Singapore; taken September 2018.OCBC, DBS, UOB and Citibank ATMs at Tang Plaza in Singapore; taken September 2018.

Tiong Seng secured a total of S$125 million from a green loan and an environmental performance-linked facility from OCBC and DBS, respectively, the construction company said in a filing to SGX Monday.

The facilities are the first sustainable-finance deals for a construction and civil engineering firm in Southeast Asia, the filing said.

“Amidst the strong ‘greening’ momentum in Singapore’s property sector and the city’s continued development toward becoming climate-resilient, Tiong Seng is committed to contributing to a safe, high quality and sustainably-built environment by using innovative technologies and adopting sustainable practices, while managing its environmental and social impacts proactively,” the company said.

From OCBC, Tiong Seng obtained a S$70 million green loan. The construction projects using the loan must have clear environmental benefits, such as certified green buildings and projects which improve resource efficiency and generating renewable energy, Tiong Seng said.

Linus Goh, head of global commercial banking at OCBC, said the deal signaled the construction and civil engineering industry’s strategic shift toward sustainable development.

“This collaboration is also an important demonstration of how we are working with our customers in leveraging green finance to catalyse the change and innovation across industries towards greener technologies and activities,” Goh said.

From DBS, it received S$55 million of environmental performance-linked facilities with the interest rate and performance bond commission tied to improvements in environmental resource use and management, Tiong Seng said.

The DBS facility will be used to refinance some existing loans and for general corporate purposes, the filing said. The company will receive interest rate and performance bond commission discounts it it meets or exceeds performance targets, the filing said.

Chew Chong Lim, managing director and global head of real estate at the institutional banking group at DBS, said environmental performance-linked facilities are part of the bank’s efforts to help companies reach sustainable development goals and adopt strategies which have a positive impact on the environment.

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