DBS, in partnership with Envision Energy, has announced a green loan facility to develop a 100-megawatt wind turbine farm in the Henan province, located in northeastern China.
DBS China also served as the sole green finance advisor for this loan to ensure that the terms comply with the China-EU Common Ground Taxonomy.
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The loan is worth RMB 500m (SGD 92m / £53.75m).
The project is expected to generate about 270 gigawatt hours of renewable energy, enough to power 90,000 households and avoid 212,600 tonnes of carbon emissions annually.
The loan will be issued under the People’s Bank of China’s (PBOC) Carbon Emission Reduction Facility and represents the first successful transaction in this programme by a Southeast Asian bank.
The programme enables participating banks to offer low-cost loans to fund sustainable development projects in China across key sectors including clean energy, energy saving, environmental protection and carbon emission reduction technologies.
The programme helps to subsidise China’s transition efforts, with PBOC providing financial institutions with funds equal to 60% of a loan’s principal at an annual interest rate of 1.75%.
As of the end of June 2024, participating banks have extended over RMB 547bn (£58.8bn) in loans.
DBS is the only Singapore bank to be selected by PBOC for the programme
DBS China CEO Ginger Cheng said: “We are honoured to be able to leverage this Carbon Emission Reduction Facility by PBOC, enabling us to provide financial support for Envision Energy’s wind power project in Puyang, Henan. This will help Envision Energy expand clean energy capacity, reduce carbon emissions, and contribute to the achievement of the ‘dual carbon’ goals. As a leader in green finance in the ASEAN region, DBS Bank will further leverage its capabilities to continue supporting green and low-carbon development, contributing to China’s high-quality sustainable economic development.”
Kelvin Wong, Head of Energy, Renewables and Infrastructure, Institutional Banking Group, DBS, added: “The energy sector accounts for almost 90% of China’s greenhouse gas emissions. To achieve the nation’s carbon neutrality goal by 2060, the energy sector will need to undergo a rapid and deep transformation. DBS is proud to support Envision Energy, which has made a name for itself in the wind energy space, take a further step in that direction. With this carbon emission reduction support tool, the cost of capital for green projects is significantly reduced, making DBS a preferred partner for businesses seeking to invest in sustainable initiatives. As the first bank in Southeast Asia to transact under this PBOC programme, we are breaking new ground for sustainable finance in the region. We will continue to deepen our green finance toolkit, explore more innovative products and services, and expand our suite of capabilities to accelerate our clients’ green transformation.”
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