Agricultural Bank of China's Singapore branch gets US$200m green club loan facility

THE Agricultural Bank of China's (ABC) Singapore branch has secured a US$200 million green loan, the first tranche of a US$465 million club loan facility. (see amendment note)

The green club loan facility is the first established under ABC Singapore branch's sustainable financing framework, jointly developed by United Overseas Bank (UOB) and BNP Paribas for the Chinese lender, both banks said in a joint announcement on Tuesday.

Leading the transaction were UOB and BNP Paribas, which were the joint green structuring advisers and coordinators for the facility. They are also the mandated lead arrangers, together with five other banks. UOB also acted as the agent in the transaction.

Loan proceeds will be used for financing green projects adhering to green financing principles, guidelines and standards referenced in the framework.

The framework provides guidelines for ABC Singapore branch to provide green, social or sustainable financing to clients or projects in areas like renewable energy, green buildings and access to "essential services" such as public transport and healthcare.

It was also independently reviewed by Sustainalytics, a global environmental, social and corporate governance research and ratings agency.

ABC's Singapore branch was established in 1995 as its first overseas branch, engaging in the business of corporate lending, foreign exchange, investment securities and more, with an advantage in China-related trade financing and settlements, and cross-border yuan-related trade services.

Chaoni Huang, BNP Paribas head of sustainable capital markets for Asia-Pacific, said Chinese banks are recognising the importance of green finance to their own sustainable growth in this region. The transaction also demonstrates that sustainable finance is evolving fast in Asia.

"With the support of the People's Bank of China and innovative policy frameworks in Singapore, forward-thinking institutions like ABC Singapore Branch are developing frameworks to guide financing to sectors that can make a big difference to the fight against climate change," she added.

Lim Lay Wah, UOB's global head of financial institutions group (banks, non-bank financial institutions and financial sponsors), said UOB's support reinforces its long-standing relationship with ABC.

"Our coordination and arrangement of the green club loan facility demonstrate UOB's responsibility and commitment to drive collaborative efforts in the financial sector to ensure the long-term economic, social and environmental well-being of the community at large," Ms Lim added.

Amendment note: A previous version of this article incorrectly stated ABC's name. The article has been corrected to reflect this.