Sembcorp bags S$40m DBS loan facility for Tuas floating solar farm

SEMBCORP Industries has obtained a S$40 million loan facility from DBS Bank to build a 60 megawatt-peak (MWp) floating solar photovoltaic system on Tengeh Reservoir in Tuas.

The lender is the sole financier for the project, DBS said in a statement on Thursday.

Sembcorp unit Sembcorp Floating Solar Singapore and Singapore's national water agency PUB on Tuesday announced the start of construction of the project, which is scheduled to be completed next year. It will result in one of the world's largest inland floating solar photovoltaic farms.

The project will cover an area of around 45 football fields. It will generate enough energy to power about 16,000 four-room Housing Board flats for a year, offsetting about 32 kilotonnes of carbon emissions annually, which is the equivalent of taking about 7,000 cars off the roads.

It will also turn Sembcorp Industries into one of the largest renewable energy players in Singapore, with about 240 MWp of solar capacity in the country.

Sembcorp Industries' head of Singapore, South-east Asia and China (Energy) Koh Chiap Khiong said the landmark project "demonstrates Sembcorp's commitment and expertise in developing large-scale renewable energy projects to contribute to Singapore's transition to a low-carbon economy".

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Lim Wee Seng, head of energy, chemicals and infrastructure, DBS Bank, said enabling renewable energy financing is at the core of DBS's agenda, and one of the key tenets of the lender's sustainability strategy.

He added that the Sembcorp loan facility builds on DBS's recent financial advisory roles in Taiwan's largest floating solar project and ground-mounted solar project.

The bank has also garnered four new advisory mandates across solar, wind and geothermal assets in Indonesia, Taiwan and Vietnam this year despite the Covid-19 outbreak, he added.

Mr Lim said renewable energy has been scaling up rapidly across the region over the last decade, giving rise to the need for more financing to fund its development - especially in developing countries - to meet climate and sustainable development goals.

DBS has dedicated S$10 billion to finance renewable and clean energy development across the region by 2024, with double-digit annual growth expected, he added.

Since 2018, the bank has completed 29 renewable projects across Asia amounting to around S$3.6 billion.