OCBC Bank Partners Shwe Taung Group on Myanmar's first green loan
Fresh off topping two 2019 regional sustainable finance league tables, OCBC Bank is building on its lead by inking Myanmar’s first green loan with Shwe Taung Group.
This is a milestone for Myanmar and proves that there is not only increasing awareness about climate change, but also the willingness to take action against it. The US$44 million green loan will be used by Shwe Taung Group’s subsidiary City Square Commercial Company Limited for the financing of Junction City Shopping Centre (Junction City), an integrated retail and commercial development in Yangon’s downtown.
The Junction City mixed-use project, which includes Junction City Office Tower, Junction City Shopping Centre and the Pan Pacific Hotel, is designed to be a sustainable development. Its green features include energy-efficient electricity and mechanical systems that lower energy consumption, utilising double-glazed glass windows, and installing roof top solar panels that reduce energy consumed from the power grid. These features reduce energy consumption by about 15 to 20 percent. In addition, the project has a self-sustaining waste treatment system ensuring a clean environment for the communities in its vicinity.
The green loan is facilitated by Junction City’s attainment of the Building and Construction Authority Green Mark certification in January 2020. It is the first shopping centre in Myanmar to receive this certification. This internationally recognised certification has also been attained by developments in other countries like China, Indonesia, Malaysia and Vietnam, to name a few.
Shwe Taung Group secured this green loan from the Yangon branches of OCBC Bank and UOB, with OCBC Bank providing close to US$30 million. OCBC Bank acted as Sole Green Loan Advisor, Mandated Lead Arranger, Facility Agent and Security Agent for the loan.
This green loan was issued under Shwe Taung Group’s green loan framework in accordance with the Green Loan Principles issued in 2018 by the Loan Market Association and the Asia-Pacific Loan Market Association.
The framework was developed together with OCBC Bank to guide Shwe Taung Group’s evaluation of eligible green projects and the management of net proceeds from green loans.
Shwe Taung Group’s pioneering step into green finance is a natural extension of its sustainability journey which has seen it become a member of the United Nations Global Compact (UNGC) since 2013 and reporting on its progress embracing the UNGC principles. Shwe Taung is also consistently in the top ranked companies in the Pwint Thit Sa report issued by the Myanmar Centre for Responsible Businesses.
Aung Zaw Naing, Chief Executive Officer, Shwe Taung Group, said, “We are proud to secure the first green loan in Myanmar and hope that this will help to catalyse the growth of green finance which is still in its early stages here. While we aim to deliver world-class developments and contribute to Myanmar’s growth story, it is important that this economic growth does not come at the expense of our environment. That is why we have put sustainability at the core of our corporate strategy and this green loan attests to our commitment.”
Last year, OCBC Bank announced that it aimed to achieve a S$10 billion sustainable finance portfolio by 2022. This green loan brings the bank closer to its goal.
Mr Linus Goh, Head, Global Commercial Banking, OCBC Bank, said, “Green financing is gathering momentum across the region as companies embrace the sustainability agenda and find support in driving climate change within their businesses and industries. We are very proud to partner Shwe Taung in delivering this first green loan in Myanmar. OCBC has had a long presence of over 60 years in Myanmar and we believe that this landmark transaction signals an important shift towards sustainability in the country at this crucial stage of economic development, and we hope it will spur other businesses to join us in this journey.”
OCBC Bank closed out 2019 by topping two sustainable finance league tables - Bloomberg’s 2019 Mandated Lead Arranger (MLA) league table for green loans and renewable energy loans, as well as the 2019 MLA league table for green loans and sustainability-linked loans by intelligence service Debtwire. Both league tables are for Asia Pacific (ex-Japan).