CDL and MCL Land secure $847m green loan package to build 1,000+ sustainable homes

Property giants City Developments Limited (CDL) and MCL Land have secured an $847m green loan package, which will be used to support a joint venture developing two sustainable housing developments in Singapore.

Pictured: An artist's impression of the Tengah Garden Walk project. Image: Singapore Housing & Development Board

Pictured: An artist's impression of the Tengah Garden Walk project. Image: Singapore Housing & Development Board

The funding will be used to support the delivery of residential developments at Northumberland Road and Tengah Garden Walk which collectively feature more than 1,000 homes.

Both developments are on course to achieve the BCA Green Mark Gold Plus certification, which is operated by the Singapore Government and is awarded to mark “outstanding achievements in environmental sustainability in the built environment”.  Energy efficiency is the key consideration; Garden Walk is targeting Singapore’s ‘Super Low Energy’ standard, which launched for residential developments earlier this year.

Green features for the Northumberland Road project, which will include 407 apartments and a childcare centre, include energy-efficient air conditioning and lighting systems, as well as an automated vacuum waste collection system. The Tengah Garden Walk Project, meanwhile, will feature onsite solar arrays that cover 30% of energy consumption; passive heating, cooling, lighting and ventilation and ‘smart’ technologies to boost energy efficiency. It will feature 628 apartments.

A $429m loan package has been confirmed for Northumberland Road and a $418m package for Tengah Garden Walk; the former is from DBS Bank and the latter from UOB. CDL and MCL Land said in a statement that both facilities are some of the largest green loans in real estate in Singapore to date. Both facilities, the statement added, are aligned with the green loan principles issued by the Asia Pacific Loan Market Association and global Loan Market Association.

CDL’s chief executive Sherman Kwek said the company has “demonstrated that green financing offers an alternative financing avenue that plays a pivotal role in channelling capital towards building smarter, greener and more climate-friendly infrastructure”.

To date, CDL has secured more than $3bn on sustainable financing, including green bonds, green loans and sustainability-linked loans. Earlier this year, the firm confirmed a new green revolving credit facility totalling $740m that will be used to refinance it's the Republic Plaza commercial property and future low-carbon projects. Shortly after that, it announced an ambition to achieve net-zero operational emissions by 2030.

For MCL Land, the loan package is a first foray into green financing. However, parent company HongKong Land has secured sustainability-linked loans of $1.9 bn to date, and has also issued two green bonds prices at $500m and HK$375m ($48.20) respectively.

Money talks

Many businesses have announced the completion of sustainability-linked loan deals during 2021 so far.

February saw the world's largest seafood firm, Thai Union, announcing a new $400m loan package with interest payments linked to climate, sustainability and due diligence targets. Within a week, brewer AB InBev had announced what it claims is the world's largest corporate sustainability-linked loan to date, priced at $10.1bn.

Other companies to have subsequently announced sustainability-linked loan deals include building materials and design giant Kingspan, home improvement and garden retailer Kingfisher and the UK's largest provider of environmental, engineering and technical services, RSK Group. Additionally, supermarket Tesco, which signed for its own £2.5bn revolving credit facility back in 2020, recently began supporting its major suppliers to follow suit.

More recently, the UK Government issued its first state-backed 'green transition loan' for a business, providing engineering and energy consultancy Wood Group support to scale up low-carbon product and service offerings. This kind of arrangement could help nations in delivering green recovery plans from Covid-19.

Sarah George



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