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

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582