ING has added another ‘first’ to its growing portfolio of sustainable finance deals in the region by sealing the first green loan in ASEAN that is compliant with LMA/APLMA 1) Green Loan Principles for a portfolio of rooftop solar projects.
This is also ING’s first solar rooftop financing transaction in Asia Pacific. ING is the Sole Mandated Lead Arranger for the S$50 million loan, which will be used to finance an approximately 50MW portfolio of rooftop solar projects. These project will be developed and owned by Sunseap Commercial Assets Pte. Ltd., a subsidiary of Sunseap Group (Sunseap).
These rooftop solar projects in Singapore will range from approximately 100kW to 5MW in size, and will benefit from long-term Power Purchase Agreements with more than 20 international and domestic commercial and industrial corporates such as PSA.
Rooftop solar projects, which tend to be individually small-scale and therefore uneconomical to finance separately, are generally funded on a guaranteed basis. “But in this case we have created an innovative structure to finance this portfolio of rooftop solar projects on a limited-recourse 2) basis and in a single loan facility. The financing is expected to help different industries in Singapore – from education to transportation to technology – offset their carbon footprint,” said Erwin Maspolim, head of Utilities, Power and Renewables, Asia Pacific at ING.
Lawrence Wu, president and executive director at Sunseap Group, said, “We are proud to be the first renewable energy company in ASEAN to secure a green loan. ING’s financing will enable us to continue generating clean energy to benefit a diverse range of clients.”
Facility aligned with Sunseap Green Finance Framework
This S$50 million loan is on the back of a green finance framework created for Sunseap, for which ING acted as the Green Structuring Advisor. The framework is aligned to a number of global principles. 3)
Under this framework, Sunseap and its subsidiaries will be able to raise green financing instruments (including green loans, green bonds or other debt instruments) to finance or refinance green projects in three eligible areas: renewable energy, energy efficiency and green roof systems. These can include renewable projects including rooftop solar, run-of-river hydro and wind energy; energy efficiency projects for example smart grids, battery storage and LED lighting retrofits, as well as roof-top greenery projects.
Sustainalytics, a leading global provider of ESG research and ratings, was asked to provide a second party opinion on Sunseap’s Green Finance Framework. Sustainalytics’ report concluded that the framework is credible and impactful, and contributes to UN Sustainable Development Goals (SDGs) 7: Affordable and Clean Energy and 11: Sustainable cities and Communities.
Herry Cho, head of Sustainable Finance, Asia Pacific at ING, commented, “ING is honoured to partner with Sunseap on this market leading transaction, and we expect this deal to spark off more demand for Green Loan Principles-compliant loans in the renewable energy sector.”
Financing renewable energy and energy efficiency projects is crucial for countries in the Asia-Pacific region. It is estimated that by 2025, ASEAN countries will be home to over 715 million people 4), many of whom currently still lack access to modern energy services. Renewables can play a key role in ensuring clean and affordable energy for people across the region.
ING recently became the first global bank to use a science-based approach to steer its business strategy towards meeting the temperature targets set by the Paris Climate Agreement. This initiative, called the Terra Approach, enables ING to measure the bank’s lending portfolio against climate-based scenarios. ING will focus specifically on the sectors that are responsible for most greenhouse gas emissions using a customised approach per sector in order to make the most impact.
“Energy is one of the key sectors for ING, and supporting renewable energy projects is clearly aligned with the goals for our Terra Approach,” Herry Cho concluded.