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PETALING JAYA: CIMB Bank Bhd has entered into a RM270 million sustainability-linked term loan (SLL) facility agreement with Singapore’s Starhub Group subsidiary Malaren International Sdn Bhd.
This mark the bank’s first foray into sustainability linked loan after its launch in January this year with a RM3 billion commitment set aside for corporate borrowers, while the SLL marks StarHub’s maiden loan linked to sustainability performance targets.
CIMB stated the facility is part of its sustainability approach, which facilitates corporate borrowers who are keen to enhance their sustainability performance in alignment with one or more of the United Nations’ 17 sustainable development goals.
Its group chief strategy and design officer Gurdip Singh Sidhu commented that the facility is especially meaningful as it brings two large organisations together in this maiden Malaysia–Singapore cross-border sustainability linked transaction.
“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 in a statement today.
StarHub CFO Dennis Chia commented that given its drive to support the growth and development of new services it is pleased to underpin its commitment to sustainability by taking up its first SLL with CIMB.
“We look forward to more opportunities to participate in sustainability-linked financing to proactively drive a sustainable business and enhance the performance of the company,” he said.
Under the facility, the bank will grant a rebate to the company’s loan interest based on its performance in its annual CDP Climate Change Scores from FY2021 to FY 2023.
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, a global benchmark of on the management of climate-related impacts.
Gurdip elaborated that CIMB is cognisant of the risks and opportunities associated with climate change, as well as its multifaceted role as a financial institution in working with stakeholders to advance sustainability principles.
“This SLL is a testament to CIMB’s commitment to help clients on their sustainability journeys, in this case by incorporating environmental and social considerations into financing terms to drive sustainable corporate behaviour,” he said, adding that it aims to encourage and enable positive developments such as climate risk mitigation and adaptation, as well as financial inclusion.
