One of the most environmentally conscious companies here, developer City Developments (CDL), has further burnished its green credentials by selling what it says is “the first green bond by a Singapore company” through a unit.
Green bond issuers give investors the assurance that the funds raised will go to projects delivering environmental benefits.
CDL said yesterday its two-year senior secured green bond, as it is called, raised $100 million at a 1.98 per cent fixed rate, due in 2019. The investors were mainly financial institutions and fund managers.
The green bond is issued under the CDL Properties’ (CDLP) $700 million secured medium-term note programme first set up in 2001. DBS Bank is the sole bookrunner on this transaction.
The green bond’s proceeds will go towards repaying a $100 million loan extended by CDL to the unit, which owns Republic Plaza.
This premium Grade A office building is directly connected to Raffles Place MRT station, and was completed in 1996.
Since then, it has added plants that help to cool the area and installed energy efficient lighting with motion sensors, to improve the building’s energy efficiency.
The building saves more than six million kilowatt-hours of energy a year. CDL said this is “equivalent to the annual energy consumption of about 1,200 three-bedroom apartment units of around 100 sq m (1,076 sq ft) each”.
It also saves about 10,255 cubic m of water – about four Olympic-sized swimming pools.
This translates into more than $1.2 million of savings from annual energy and water consumption, noted the firm.
CDL deputy chief executive Sherman Kwek said: “CDL’s inaugural green bond… links our sustainability initiatives with the capital markets and enables us to tap investors who are supportive.”
He noted the move complements the Government’s target of “greening at least 80 per cent of the country’s building stock by 2030”, vital to Singapore’s climate pledge to reduce greenhouse gas emissions.
In fact, a green bond grant scheme will begin from June, to start introducing such bonds as a new asset class.
National Development Minister Lawrence Wong said last month that sustainable investments have gone mainstream, and Singapore is taking steps to match the demand by growing a green bond market.
More than this amount in kilowatt-hour of energy a year is saved by Republic Plaza.
This is the amount in cubic metres of water that is saved by Republic Plaza.
More than this amount is saved by Republic Plaza from its annual energy and water bill.
He noted the global green bond market has grown rapidly over the years, reaching more than US$80 billion (S$112 billion) last year.
DBS fixed-income head Clifford Lee said the move “will kick-start the development of a green bond market in Singapore… (and) augment efforts by the financial industry towards responsible financing”.
Mr Kwek added that real estate firms have a large role to play, and green finance offers an alternative financing stream.
“There is an increased interest in socially responsible investments and a growing demand for relevant products,” he noted.