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
Previous ArticleFCA Announces Enhancements to New Data Collection Platform RegData
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.