KUALA LUMPUR: CIMB Bank Bhd has entered into a RM270 million sustainability-linked term loan facility agreement with Malaren International Sdn Bhd, a subsidiary of StarHub Group, Singapore's provider of communications, information and entertainment services.
In a statement today, CIMB said this marks the bank's first sustainability-linked loan (SLL) since announcing its SLL offering in January 2020, with a commitment of RM3 billion to SLL for corporate borrowers.
The SLL also marks StarHub's maiden loan linked to sustainability performance targets.
CIMB Group chief strategy and design officer Gurdip Singh Sidhu said the facility is especially meaningful as it brings two large organisations together in this maiden Malaysia – Singapore cross-border sustainability-linked transaction.
"It is a testament also to CIMB's commitment in driving the sustainability agenda across Asean.
"Since announcing our SLL offering early this year, we are encouraged by the high levels of interest amongst clients in Malaysia as well as the region," he said.
"As we are driving our business to support the growth and development of new services, we are pleased to underpin our commitment to our sustainability strategy by taking up our very first sustainability-linked loan with CIMB.
"We look forward to more opportunities to participate in sustainability-linked financing to proactively drive sustainable business and enhance the performance of the company," StarHub chief financial officer Dennis Chua said.
CIMB said to incentivise environmental transparency and performance, the bank will grant a rebate against the loan interest based on StarHub's performance in its annual CDP Climate Change Scores from the financial year 2021 to 2023.
It said StarHub will be eligible for interest savings each year if it is able to achieve the pre-agreed annual targets on CDP Climate Change Scores.
CDP, formerly known as the Carbon Disclosure Project, is a leading global benchmark on the management of climate-related impacts, to assess responders' progress towards environmental stewardship.
CIMB is a founding signatory of the United Nations Environment Programme Finance Initiative (UNEP FI) Principles for Responsible Banking, the first Asean banking group to become a signatory, and a signatory of the Collective Commitment on Climate Action.
In 2019, CIMB introduced its Group Sustainable Financing Policy and the Positive Impact Products & Services (PIPS) Framework.
In line with these, CIMB was also one of the first banks in Malaysia to announce the SLL incentive, with RM3 billion being set aside for corporate borrowers.