Earlier this year, Ho Bee appointed HSBC as its green structuring advisor in the commissioning and development of its Green Finance Framework. The Framework is part of Ho Bee’s goal of enhancing its business into a sustainable one. The framework has been successfully certified by third-party sustainability certifier, Sustainalytics1.
The first transaction executed under the Framework is the bridging loan, provided by HSBC, as part of the acquisition of Ropemaker Place (a 21-storey commercial development in London with LEED Platinum pre-certified, BREEAM Excellent rating).
Whilst Singapore has seen a string of green bonds and sustainability-linked loans over 2017 and 20182, this deal is the first green loan in Singapore and also the first that aligns to the LMA/APLMA Green Loan Principles. (See Editor Notes for details on difference between sustainability-linked loans and green loans and the APLMA Green Principles).
Mr Chua Thian Poh, Chairman and Chief Executive Officer of Ho Bee said, “As part of our Green Finance Framework, we are pleased to secure Singapore's first green loan through HSBC. We have always pride ourselves in developing and investing into quality properties and now, we are able to tap onto green financing to fund projects that are both environmentally friendly and sustainable.”
“With this inaugural green loan, it affirms Ho Bee’s position as a forward-looking company and its strong commitment towards building a sustainable business model,” Mr Chua added.
Commenting on the experience of developing the Ho Bee Green Finance Framework, Alan Turner, Head of Commercial Banking, HSBC Singapore, said: “HSBC is proud to have partnered with Ho Bee in this inaugural green loan in Singapore. By setting up its Green Finance Framework, Ho Bee has been able to realise its green vision and ambitions as well as provide it with the necessary infrastructure to tap green financing in future. Moreover, the deal is good news for Singapore’s green financing credentials as it sets the template for other corporates seeking similar green transactions in the future.”
Speaking on the deal: Trisha Taneja, Product Manager for Sustainable Finance Solutions at Sustainalytics said: “We are excited to see HSBC and Ho Bee Land complete the work on Singapore’s first Green loan, which is aligned with the APLMA green loan principles. The HSBC loan to Ho Bee Land expands the green financing label to debt instruments other than green bonds, and is a significant step to scale the flow of capital to environmentally impactful projects. Sustainalytics is honored to have been selected as the second opinion provider to assess the quality of loan.”
Note to editors:
HSBC as Ho Bee’s green structuring advisor
HSBC was appointed by Ho Bee to act as its green structuring advisor, which involves HSBC:
(1) Developing and preparing the Green Finance Framework with Ho Bee which sets out and articulates how Ho Bee – as a company - will be compliant with the Green Loan Principles and the Green Bond Principles when it enters into fund raising activities for specific green projects in future (see below for details on the Green Loan Principles)
(2) Partnering with green assurance provider, Sustainalytics (whom Ho Bee commissioned), to test the veracity/credibility of Ho Bee’s Green Finance Framework
(3) With the establishment of the Ho Bee Land Green Finance Framework, and the completion of Second Party Opinion assessment by Sustainalytics, the loan for the acquisition of Ropemaker Place by Ho Bee Land becomes an eligible transaction under the Ho Bee Land Green Finance Framework.
Green Loan Principles
To comply with the Green Loan Principles, companies could develop and publically publish a “Framework” setting out their intention to raise Green Loans, how these loans will meet the four pillars of the Green Loan Principles, and how they will obtain an external review to verify that their actions match their claims.
On 21 March 2018, the Loan Market Association and the Asia Pacific Loan Market Association jointly issued the Green Loan Principles to formalise what constitutes a green loan. These set out 4 key criteria that a Green Loan should adopt being:
Actions of Singapore government in supporting sustainable financing
The difference between a green loan and sustainability-linked loans
2 Examples of Singapore green deals