Sembcorp Industries gets S$1.2B sustainability-linked syndicated credit line

An aerial view of Sembcorp Industries' Tengeh Floating Solar Farm. Credit: Sembcorp IndustriesAn aerial view of Sembcorp Industries' Tengeh Floating Solar Farm. Credit: Sembcorp Industries

Sembcorp Industries has obtained a five-year S$1.2 billion syndicated sustainability-linked revolving credit facility, the energy and infrastructure company said in a filing to SGX Wednesday.

The loan facility is subject to margin adjustments based on pre-set sustainability performance targets as part of the company’s brown-to-green transformation strategy, Sembcorp Industries said.

The interest rate of the facility will face a step-up margin if the targets aren’t met by end-2025, the filing said. The targets include reducing greenhouse gas (GHG) emissions intensity and reaching gross installed renewable energy capacity of 10 gigawatts, Sembcorp said.

Previously, the company has said it set a goal of reducing its GHG emissions intensity to 0.4 tCO2e/MWh by 2025, or a 25 percent reduction from 2020 levels, in line with the long-term goal of the 2015 Paris Agreement to limit global warming. The company has previously said it is targeting net-zero emissions by 2050.

GHG emissions intensity is defined as the group’s total greenhouse gases from direct emissions from its activities, indirect emissions from its energy consumption and biogenic emissions from bioenergy feedstock, divided by the total energy generated and purchased.

The proceeds will be used for general corporate purposes and/or financing or refinancing renewable energy or other sustainable projects, Sembcorp said.

The loan facility is fully underwritten and arranged by ANZ Banking Group, DBS Bank and OCBC, which all acted as mandated lead arrangers and bookrunners, the filing said. ANZ was the lead sustainability coordinator, and DBS and OCBC are joint sustainability coordinators, the filing said.

The facility is the first Singapore overnight rate average-based syndicated sustainability-linked loan facility for a Southeast Asian energy company, the filing said.

The facility was obtained via Sembcorp Industries’ wholly owned subsidiary Sembcorp Financial Services, the filing said.