FRASERS Centrepoint Trust : J69U 0% (FCT) has bagged a S$419 million green loan from OCBC : O39 0% with carbon credits as part of the deal. 

On Thursday (Jul 6), both the real estate investment trust’s (Reit) manager and bank said this is Singapore’s first green financing solution that comprises a green loan and carbon credits.

Proceeds from the loan will be used for decarbonisation projects that include procuring energy-efficient technology for Tampines 1, which is in the midst of a S$38 million asset enhancement initiative (AEI).

FCT and OCBC said this would enable the seven-storey mall to progress towards carbon-neutral status, as the mall’s plans to further reduce carbon emissions include the installation of solar panels on its roof in Q4 2023.

Sustainability initiatives in 2024 will focus on enhancing efficiency throughout the mall through Air-Conditioning and Mechanical Ventilation airside optimisation.

Other uses for the loan proceeds include refinancing the trust’s maturing facility, as well as for its AEIs.

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FCT will invest the carbon credits, which are sourced through OCBC’s emissions trading desk, in Verra or Gold standard-certified carbon reduction nature-based projects.

The trust aims to reduce carbon in an amount which is on a par with financed emissions associated with the green loan.

It also intends to purchase additional carbon credits to account for Scopes 1, 2 and 3 emissions of Tampines 1’s carbon footprint.

While Scope 1 and Scope 2 emissions are “residual and unavoidable”, Scope 3 emissions of the mall will encompass all energy-related emissions for landlord and tenant controlled-area consumption. 

“This new financing solution will pave the way for us to support green buildings, while directing more capital towards carbon credit generating projects,” said Elaine Lam, head of global corporate banking at OCBC.

“Through working with FCT and its sponsor Frasers Property Group, we have also achieved a deeper understanding of the sustainability ambitions and needs of our real estate clients, which will allow us to support them better in future.”

FCT units closed on Wednesday S$0.02 or 0.9 per cent lower at S$2.16, and OCBC ended S$0.12 or 1 per cent down at S$12.23.