CDL’s Green Bond Issue Fast-Tracks Singapore’s Sustainability Goals
(3BL Media/Justmeans) – Real estate companies around the world have a key role to play in mitigating climate change and meeting the 2030 UN Sustainable Development Goals (SDGs). Green bonds are a vital instrument of sustainable finance that can support the massive global investments in green infrastructure required to achieve the SDGs.
The government of Singapore has been taking steps to match the demand for sustainable investments, which include promoting green bonds locally. As one of Singapore’s largest commercial land developers, City Developments Limited (CDL), through its wholly-owned subsidiary CDL Properties Ltd (CDLP), has successfully launched the first green bond by a Singapore company.
The two-year senior secured green bond has raised S$100 million at 1.98% fixed rate due 2019. The success of CDL’s inaugural green bond issuance not only strengthens its industry leadership in ESG performance, but also paves the way for other Singapore firms to tap into the fast-growing green bond market to finance green building projects and sustainability initiatives.
The investors in the CDL green bond issue comprise mainly financial institutions and fund managers, while DBS Bank Ltd. (DBS) is the sole bookrunner on this transaction. According to Sherman Kwek, Deputy CEO of CDL, the inaugural green bond links CDL’s sustainability initiatives with the capital markets and enables it to tap on investors who are supportive of the commitment that the company has made over the past two decades towards sustainability best practices.
CDL’s green bond issuance also complements the Singapore government’s target of greening at least 80 percent of the country’s building stock by 2030, which could potentially be the lynchpin of Singapore’s climate pledge to reduce its GHG emissions.
Proceeds of CDL’s first green bond will be allocated to the repayment of a S$100 million loan extended by CDL to CDLP which owns Republic Plaza. Completed in 1996, Republic Plaza is one of Singapore’s tallest skyscrapers in the heart of Singapore’s Central Business District. In 2012, Republic Plaza was awarded by Building and Construction Authority (BCA) with the highest Green Mark Platinum rating.
As a result of continuous efforts to enhance energy and water efficiency, Republic Plaza currently saves more than six million kilowatt-hour of energy annually, equivalent to the annual energy consumption of about 1,200 three-bedroom apartment units. It also saves about 10,255 cubic meters of water. In total, this translates into more than S$1.2 million of savings from annual energy and water consumption.