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ING brokers S$50m green loan to fund Sunseap's rooftop solar projects
DUTCH lender ING, as the sole mandated lead arranger, has brokered a S$50 million loan deal for Singapore sustainable energy firm Sunseap Group. The loan will fund a 50 megawatt portfolio of rooftop solar projects in the Republic.
The five-year loan - ING’s first such financing transaction in the Asia-Pacific - is structured on a limited-recourse “project finance” basis, and the repayment profile is based on a 15-year amortisation schedule. When asked about the loan's interest rate, the bank said it is "very competitive" given the merits of the transaction, such as the quality of the power purchase agreements and it being a green loan.
The rooftop solar projects, developed and owned by Sunseap subsidiary Sunseap Commercial Assets, will range from about 100 kilowatts to five megawatts in size, and will benefit from long-term power purchase agreements with more than 20 international and domestic commercial and industrial corporates such as PSA.
This loan is on the back of a green finance framework created for Sunseap, for which ING acted as the Green Structuring Advisor.
Under this framework, Sunseap and its subsidiaries will be able to raise green financing instruments - including green loans, green bonds or other debt instruments - to finance or refinance green projects in three eligible areas: renewable energy, energy efficiency and green roof systems. These can include renewable projects including rooftop solar, run-of-river hydro and wind energy; energy efficiency projects such as smart grids, battery storage and LED lighting retrofits, as well as roof-top greenery projects.
Rooftop solar projects, which tend to be individually small-scale and therefore uneconomical to finance separately, are generally funded on a guaranteed basis.
“But in this case we have created an innovative structure to finance this portfolio of rooftop solar projects on a limited-recourse basis and in a single loan facility. The financing is expected to help different industries in Singapore – from education to transportation to technology – offset their carbon footprint,” said Erwin Maspolim, ING's Asia-Pacific head of utilities, power and renewables.
Lawrence Wu, Sunseap Group's president and executive director, said it is the first renewable energy company in Asean to secure a green loan, and ING’s financing will enable Sunseap to "continue generating clean energy to benefit a diverse range of clients".
A joint report by the Asean Centre for Energy and International Renewable Energy Association estimates that Asean countries will be home to over 715 million people by 2025, many of whom still lack access to modern energy services. Renewables can play a key role in ensuring clean and affordable energy for people across the region.