Development Bank of Singapore (DBS) has provided an AUD 207 million ($137 million) green loan to Malaysia’s largest pension fund Retirement Fund (Incorporated) (KWAP) to refinance a Grade A green office tower in Australia.
DBS said in a statement on Tuesday that this is the first green loan that KWAP has secured to expand its environmental, social, and corporate governance (ESG) footprint in Australia.
Wholly owned by KWAP, the 17-level office building located in Collins Street, Melbourne, holds a 6 Star NABERS energy rating (without Green Power) – the highest rating for building energy efficiency in Australia.
This is in recognition of its many sustainability attributes, including rooftop solar panels and a trigeneration system that recycles waste heat from onsite power generation for heating and cooling purposes.
According to the statement, DBS provided the green loan for the building in accordance with its Sustainable and Transition Finance Framework and Taxonomy, which was launched in 2020 to help clients transition towards more sustainable business models.
The loan provisions are aligned with internationally -recognized Green Loan Principles.
“The built environment sector is ripe for decarbonization as it accounts for a quarter of all greenhouse gas emissions,” said Niraj Mittal, Country Head of DBS Australia.
According to him, the industry recognizes this as the firm has observed growing demand for green finance products from a wide spectrum of organizations and not just real estate companies.
He said the firm has been financing green infrastructure and properties across Asia Pacific to support the region’s transition towards a low carbon future.
“In Australia, we are very active in green and sustainability-linked financing to support our strategic clients’ sustainability goals,
“DBS is proud to be partnering with KWAP as a pioneer in sustainability,” he added.
It is noted that TrustCapital Advisors Investment Management is KWAP’s investment manager for this green loan.
KWAP said in a separate statement that the building is one of KWAP’S major asset holdings in the region since October 2013.
It noted that DBS, is the incumbent lender for the building in the last seven years, starting in 2016.
“Building a portfolio that generates long-term returns for our stakeholders has always been KWAP’s top priority as part of our value creation journey,” said Hazman Hilmi Salahuddin, Chief Investment Officer of KWAP.
“It is an even greater achievement if it can be accomplished in a way that supports our effort to continue spearheading the ESG agenda,
“We are thrilled to work with DBS as we progress on this path towards making environmentally and sustainably conscious decisions for our portfolio,” he said.
DBS is a leading financial services group in Asia with a presence in 19 markets.
Headquartered and listed in Singapore, the bank is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia.
The bank provides a full range of services in consumer, small and medium-sized enterprise (SME) and corporate banking.
Established in 2007, KWAP manages contributions from the federal government and relevant agencies made into the retirement fund to obtain optimum returns on its investments through sound management and investment of the fund in equity, fixed-income securities, money market instruments, and other forms of investments.
The fund will be applied towards assisting the federal government in financing its pension duties.
In 2015, KWAP was officially appointed as an agent of the federal government for the purpose of pension payment, gratuity, or other benefits granted under any written law from the consolidated fund as agreed between the federal government and KWAP.