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CapitaLand gets S$300m in sustainability-linked loans, Sembcorp to install solar panels on properties

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Sembcorp will install, own and operate the solar panels at six CapitaLand properties located at Techpoint (picture), 1 Changi Business Park Avenue 1, 9 Changi South Street 3, 2 Senoko South Road, 40 Penjuru Lane, and LogisTech.

SINGAPORE's green ambitions got another boost with CapitaLand raising a total of S$300 million in new sustainability-linked loans with various banks and its partnership with Sembcorp Industries to install solar panels atop six of its properties.

For the sustainability-linked loans, CapitaLand said it partnered Societe Generale, Credit Agricole Corporate & Investment Bank and Natixis Bank new sustainability-linked loans, allowing it flexibility to use the loans on green projects such as the installation of solar panels, as well as for general corporate purposes.

Through the five-year multicurrency sustainability-linked loans, interest rates may also be reduced based on CapitaLand’s achievements of environmental, social and governance metrics.

CapitaLand will be the first company in Asia to partner Societe Generale for a sustainability-linked loan, and the first real estate partner in Asia for Credit Agricole Corporate & Investment Bank and Natixis for a sustainability-linked loan.

Meanwhile, the solar panel project will see Sembcorp will install, own and operate the solar panels, with no installation cost incurred on CapitaLand's side. This makes the initiative "a good business case for sustainability", CapitaLand said.

The six CapitaLand properties getting the solar panel installations are held under Ascendas Real Estate Investment Trust (Reit), CapitaLand’s business space and industrial Reit.

They are located at 1 Changi Business Park Avenue 1, 9 Changi South Street 3, 2 Senoko South Road, 40 Penjuru Lane, Techpoint and LogisTech.

Together, the solar farms, which will see more than 21,000 solar panels being installed, will be able to generate around 10,292 megawatt hours of energy annually.

This is equivalent to powering about 2,300 four-room Housing & Development Board (HDB) flats each year. In addition, any surplus solar power generated will be channelled to the grid.

The solar energy system will also help avoid over 4.3 million kilogrammes of carbon dioxide emissions a year, which is equal to taking around 937 cars off the road or planting over 52,000 trees.

Koh Chiap Khiong, Sembcorp head of Singapore, South-east Asia & China (Energy), said the new project reinforces the group’s strong commitment to sustainability and its continued efforts to support Singapore’s goal of reaching its target of 350 megawatt-peak of solar capacity by next year.

Sembcorp added that the agreement is not expected to have a material impact on the earnings per share and net asset value per share of the group for the financial year ending Dec 31, 2019.

When completed, CapitaLand will house Singapore's largest combined rooftop solar farm by a real estate company, with the aim of providing renewable energy and significantly lowering CapitaLand’s carbon footprint.

CapitaLand said that these efforts would also bring the group closer to its new sustainability targets to generate at least 20 per cent energy consumption from renewable energy for its enlarged global portfolio by 2025.

The group's chief sustainability officer Lynette Leong said that following the group's recent integration with Ascendas-Singbridge, it will now leverage a wider network of properties to "contribute meaningfully towards sustainability".

The group will also explore the use of renewable energy certificates resulting from the excess energy generated by the solar panels installed at the six properties to offset the carbon emissions from CapitaLand’s corporate operations at its Singapore headquarters in Capital Tower and Galaxis.

"We will further review opportunities within our enlarged global portfolio to deploy clean energy technologies to power our real estate operations," Ms Leong added.

As at 12.32pm on Tuesday, CapitaLand shares were trading at S$3.67, down one Singapore cent or 0.27 per cent; and Ascendas Reit units were trading at S$3.06, down five Singapore cents or 1.61 per cent. Sembcorp shares meanwhile, were trading at S$2.40, down one Singapore cent or 0.42 per cent.