Sembcorp Marine has secured a sustainability-linked S$500 million (US$375 million) facility from DBS bank, which is believed to be the first Singapore Overnight Rate Average-based sustainability-linked loan for the offshore and marine industry.
The loan features interest rate discounts linked to pre-determined environmental, social and governance (ESG) targets. As these ESG targets are achieved, Sembmarine will enjoy savings in borrowing costs.
“The inclusion of green financing dovetails with our strategic transformation and pivot since 2015 to provide innovative engineering solutions to the global offshore & marine and energy industries, with a keen focus on cleaner, greener and renewable energy solutions,” said Sembcorp Marine group finance director, William Goh.
“This sustainability-linked financing complements our ongoing efforts to proactively manage the environmental impact of our business.”
In 2019, some S$530 million of Sembmarine’s projects were related to green solutions including gas and renewable energy projects, and scrubber and ballast water management system retrofits.
The contractor has already introduced more green features in its operations. Two years ago, it partially replaced its grid-supplied electricity with clean energy harnessed from the solar-roof installed at the steel fabrication facility at its Tuas Boulevard Yard.
This solar source generated more than 5000 MWh of electricity, enabling Sembmarine to avoid emissions of approximately 2100 tonnes of carbon dioxide.
“As a purpose-driven bank, we believe financial institutions have a strategic and pivotal role to play in proactively supporting industries work towards a lower-carbon future,” commented DBS’ head of oil and gas, Dorian Delteil.
“Every transitional step will contribute to making an important difference, and we strive to continue engaging with like-minded clients, such as Sembcorp Marine, in making the shift towards more sustainable operations and working towards achieving a net zero emissions economy.”
DBS has committed to finance S$50 billion in renewable, clean-energy and green projects by 2024, more than doubling its earlier target of S$20 billion.
It is also the first Singapore bank to offer transition financing and launched the world’s first sustainable and transition finance framework and taxonomy to help clients advance on sustainability agenda.