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ComfortDelGro gets A$25m green loan to buy hybrid buses in Australia

CDC Melbourne Green Hybrid Bus.jpg
Proceeds from the green loan will be used to purchase 50 hybrid buses.

COMFORTDELGRO'S Australian subsidiary has secured a A$25 million (S$23.1 million) green loan from OCBC Bank to finance its hybrid bus fleet in Victoria, both companies announced in a joint statement on Tuesday.

The loan was structured according to the green loan principles issued in 2018 by the Loan Market Association and Asia Pacific Loan Market Association.

Proceeds from the green loan will be used to purchase 50 hybrid buses. Delivery of these environmentally friendly buses has begun, with the last batch of buses expected in mid-2022, ComfortDelGro and OCBC said.

These low-floor buses will feature Volvo's parallel hybrid driveline and meet Euro VI emission standards.

According to both companies, tests have shown that the Volvo hybrid driveline reduces nitrogen oxide and particulate emissions by up to 50 per cent, and lowers fuel consumption by up to 39 per cent in mixed traffic.

They added that the hybrid buses use 30 per cent less fuel and emit significantly less noise when idling at, and departing from stops.

Yang Ban Seng, managing director and group CEO of ComfortDelGro noted that sustainability considerations are at the core of the group's business strategy, and that the green loan is another milestone following the group's inclusion in the Dow Jones Sustainability Asia Pacific Index last September.

Separately, the loan also expands OCBC Bank's sustainable finance portfolio to the transportation sector, and is in line with the lender's goal of building a S$10 billion sustainable finance portfolio by 2022.

Elaine Lam, head of global corporate banking at OCBC Bank, noted that investment in low carbon public transportation is critical to developing sustainable cities.

"We hope this green loan sends a positive message to encourage peer industry players to take steps to support sustainable urban development through green financing options," Ms Lam added.

As at 10.02am on Tuesday, ComfortDelGro shares were trading at S$2.23, down two Singapore cents, or 0.9 per cent.