The latest developments in the ESG space.

DBS
DBS has provided an A$207 million ($136.9 million) green loan to Retirement Fund (Incorporated) (KWAP) to refinance a Grade A green office tower in Australia. 

This debt instrument is the first green loan that KWAP – the largest public sector pension fund in Malaysia – has secured, Singapore-headquartered DBS said in a statement. 

Wholly owned by KWAP, the 17-level office building located in Collins Street, Melbourne, holds a 6 Star NABERS energy rating (without green power) – the highest rating for building energy efficiency in Australia, DBS said.

The building has rooftop solar panels and a trigeneration system that recycles waste heat from onsite power generation for heating and cooling purposes.   

The development of green bonds – lending to projects that are designed to reduce humans’ reliance on fossil fuels, for example – has been a theme in markets, including those in Asia. In August 2022, Singapore’s inaugural sovereign green bond, carrying a 50-year maturity, was priced. It was oversubscribed.

Some S$2.35 billion ($1.7 billion) of the 50-year bond was placed with accredited investors and institutions. From 5 August to 10 August, the remaining S$50 million of the bond was offered to individual investors. The popularity of green bonds has given issuers an opportunity to raise finance cheaply, raising questions over whether investors will earn attractive returns now that central bank interest rates have risen over the past two years. The S&P Green Bond Index is off its highs of 2023 (in July) but remains higher than it was a year ago.