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OCBC Bank launches framework that gives Singapore SMEs increased access to sustainable financing

OCBC Bank launches framework that gives Singapore SMEs increased access to sustainable financing

  • 24 Nov 2020

OCBC Bank has developed a framework – the OCBC SME Sustainable Finance Framework – that makes it simpler and less costly for Singapore small and medium enterprises (SMEs) to access sustainable financing of up to S$20 million to accelerate their sustainability plans.

SMEs will no longer need to spend time and resources to develop bespoke sustainable finance frameworks, prior to applying for sustainable financing, to show that the proceeds will be deployed in accordance with internationally recognised green standards.

The financing framework is for SMEs that are involved in sustainable activities across eight Green Project Categories eligible under the Green Loan Principles by the Loan Market Association.

Eight Green Project Categories

 1.      Clean transportation

 2.      Eco-efficient and/ or circular economy adapted products, production  technologies and processes

 3.      Energy efficiency

 4.      Green buildings

 5.      Environmentally sustainable management of living natural resources  and land use

 6.      Pollution prevention and control

 7.      Renewable energy

 8.      Sustainable water and wastewater management

To ensure that a wider group of SMEs can access sustainable financing, the new Framework is also applicable to projects in these eight categories that do not have internationally or nationally recognised sustainable certification schemes established. An example is the Building and Construction Authority’s Green Mark Scheme.

The new framework was supported through the Monetary Authority of Singapore’s Green and Sustainability-Linked Loan Grant Scheme.

The sustainable financing provided through this new framework can be in the form of solutions such as green loans, green letters of credit and green banker’s guarantee.

The OCBC SME Sustainable Finance Framework has been verified by V.E, a global leader in ESG assessments, data, research, benchmarks and analytics, in accordance with the Green Loan Principles (GBP). V.E is of the opinion that “OCBC SME Sustainable Finance Framework” is aligned with the four core components of the Green Loan Principles, including clearly identified expected sustainable benefits.

Mr Linus Goh, Head, Global Commercial Banking, OCBC Bank, said: “We are pleased to launch the OCBC SME Sustainable Finance Framework, developed with the support of the newly-launched MAS grant scheme for green and sustainability-linked loans.

As a leading SME bank in the region, our ambition is to make SME financing green — to help SMEs in the shift towards greener businesses and sustainable development. Over the past two years, we have supported SMEs and mid-cap corporates in their maiden green loans and projects in green buildings, hospitality, construction and solar projects totalling over $1.6 billion.

This framework is designed to make it simple for SMEs to access green financing for their businesses and projects, without the complexity and cost of establishing a customised framework for each company. We believe this will help our SME customers accelerate their sustainability plans — both the SMEs which are enabling the change of industries and businesses as service providers in sustainability-linked efforts such as renewable energy, sustainable water and waste water treatment, as well as SMEs across all industries which are beginning to evaluate and adopt sustainability practices in their businesses, directing investments into green businesses, technology and infrastructure.” 

Adriana Cruz Felix, V.E Head of Sustainable Finance Research, stated, “SME’s contribute significantly to growth, employment and innovation and supporting their efforts will be vital in order to reach the United Nations’ Sustainable Development Goals and post-COVID recovery. We are proud to have supported OCBC in this innovative mission which will help mobilise the flow of sustainable finance towards regional SMEs”


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