Singapore-based lodging trust CapitaLand Ascott Trust (CLAS) has secured a S$165 million (US$124.7 million) a multi-currency revolving credit sustainability-linked loan (SLL) from local bank OCBC.

Under the loan agreement, CLAS will receive interest rate reductions upon meeting the agreed annual greenhouse gas (GHG) emissions reduction targets. Proceeds of the facility will be used for general corporate purposes. 

CLAS’ GHG emissions reduction targets, the firms note, are aligned with its sponsor CapitaLand Investment’s (CLI) 2030 Sustainability Master Plan. CLI, Singapore’s biggest developer, has committed to achieving net-zero emissions by 2050 for its Scope 1 and 2 GHG emissions, and targets to reduce absolute Scope 1 and 2 GHG emissions by 46% by 2030 (using 2019 as the base year).

These targets have been validated by the internationally recognized Science Based Targets initiative (SBTi) in 2022 to be in line with a 1.5 degree Celsius trajectory, in alignment with the goals of the Paris agreement.

The loan, the bank says, reflects its commitment to supporting its customers on their net-zero journeys with market-leading transition advisory and innovative financing solutions. The bank’s sustainable financing loans, as of June 30, have grown 33% from a year ago, and total sustainable financing loan commitments stood at S$63.3 billion.

“With this facility, CLAS has secured a total of over S$700 million in sustainable financing to date,” says Serena Teo, CEO of CapitaLand Ascott Trust Management and CapitaLand Ascott Business Trust Management (the managers of CLAS).

Elaine Lam, OCBC’s head of global corporate banking, adds: “Despite macroeconomic challenges, it has been very encouraging to see more companies across various sectors in the region chart out their net-zero journeys and setting SBTi-aligned decarbonization targets. For those companies that are not quite as advanced yet, we have been actively engaging them on their transition plans and viable next steps to take.”