Frasers Centrepoint Trust (FCT), a real estate investment trust in Singapore, has secured a $419 million green loan from OCBC Bank that includes carbon credits as part of the deal. This is reportedly the first green financing solution in Singapore that combines a green loan and carbon credits. The loan proceeds will be used for decarbonisation projects, including the implementation of energy-efficient technology at the Tampines 1 shopping mall, which is undergoing a $38 million asset enhancement initiative. These projects are aimed at helping the mall achieve carbon-neutral status, with plans to install solar panels on its roof by the end of 2023.
In addition to the Tampines 1 mall, the loan funds will also be used for refinancing and other asset enhancement initiatives. FCT plans to invest the carbon credits obtained through OCBC’s emissions trading desk in certified carbon reduction nature-based projects. The trust aims to reduce carbon emissions in an amount equal to the emissions associated with the green loan. It will also purchase additional carbon credits to account for the carbon footprint of the Tampines 1 mall.
The partnership between FCT and OCBC highlights the commitment to sustainability in the real estate industry. OCBC’s head of global corporate banking, Elaine Lam, stated that the financing solution supports green buildings and directs capital towards carbon credit generating projects. She also emphasized the importance of understanding the sustainability ambitions and needs of real estate clients to better support them in the future.
Despite this positive development, FCT’s units closed trading unchanged at $2.16 on Thursday, while OCBC’s stock fell 1.06% to $12.10. However, the partnership between FCT and OCBC sets a precedent for future green financing solutions in Singapore’s real estate sector, demonstrating the potential for aligning financial investments with sustainability goals.