Featured Product

    MAS Launches Scheme to Support Green and Sustainability-Linked Loans

    November 24, 2020

    MAS announced launch of the Green and Sustainability-Linked Loan Grant Scheme (GSLS), which will be effective as of January 01, 2021. The scheme seeks to support corporates of all sizes to obtain green and sustainable financing by defraying the expenses of engaging independent service providers to validate the green and sustainability credentials of the loan. The grant encourages banks to develop green and sustainability-linked loan frameworks to make such financing more accessible to small and medium-size enterprises (SMEs). In addition, MAS will expand the scope of the existing Sustainable Bond Grant Scheme (SBGS) to include sustainability-linked bonds, effective immediately. Beyond grant support for pre-issuance costs, the enhanced SBGS will now cover the post-issuance costs of engaging independent sustainability assessment and advisory service providers to obtain external reviews or report for bonds under the scheme.

    The GSLS will enhance the ability of corporates to obtain green and sustainability-linked loans. The grant will cover expenses incurred by corporates to engage independent sustainability assessment and advisory service providers to develop green and sustainability frameworks and target, obtain external reviews (which includes a second party opinion, verification, certification or rating), and report on the sustainability impact of the loan. MAS will defray up to SGD 100,000 of these expenses per loan. The grant will also cover expenses incurred by banks to engage independent sustainability assessment and advisory service providers to develop frameworks, obtain external reviews, and report on the allocated proceeds of loans originated under the framework. MAS will defray up to 60% of these expenses, capped at SGD 120,000 for such green and sustainability-linked loan frameworks. MAS will also defray by 90% the expenses incurred by banks to develop frameworks specifically targeted at SMEs and individuals, capped at SGD 180,000 per framework. This is to intended further encourage banks to provide greater support to SMEs and enable individuals to contribute to the sustainability agenda by integrating sustainability considerations in their financing decisions. 

    The GSLS is an initiative under Green Finance Action Plan of MAS and will support the aim to develop green and sustainable financial markets and products to support the transition of Asia to a low-carbon future. MAS will require corporates to engage independent sustainability assessment and service providers and obtain independent external reviews on these loans to demonstrate alignment with internationally recognized standards. Accompanying the launch of the GSLS, BNP Paribas, OCBC Bank, and UOB have introduced innovative green and sustainability-linked loan frameworks that will qualify for the scheme. The banks’ frameworks feature standardized criteria and processes, which will streamline assessments of green and sustainable lending to corporates, and support the banks’ clients, including both SMEs and large corporates, in financing circular economy projects, renewable energy initiatives, and energy efficiency activities, in addition to promoting sustainable supply chain practices. Through these frameworks, the banks seek to direct financing to activities that promote sustainable development in Singapore and Asia.

     

    Keywords: Asia Pacific, Singapore, Banking, GSLS, Sustainable Finance, ESG, Low-Carbon Economy, Credit Risk, MAS

    Related Articles
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    News

    HKMA to Increase Focus on Suptech and Regtech Cloud Adoption

    HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.

    June 17, 2021 WebPage Regulatory News
    News

    EC Consults on Improving Transparency in Secondary Markets for NPLs

    EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).

    June 16, 2021 WebPage Regulatory News
    News

    BIS and Nordic Central Banks Launch Innovation Hub in Stockholm

    BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked

    FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.

    June 16, 2021 WebPage Regulatory News
    News

    EC Releases Sustainable Finance Taxonomy Compass

    EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    EIOPA to Consider Liquidity Risk in Stress Test for 2021

    EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.

    June 15, 2021 WebPage Regulatory News
    News

    ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending

    The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.

    June 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7116