CIMB Bank provides RM270m sustainability-linked loan to StarHub


  • Banking
  • Friday, 18 Sep 2020

CIMB Bank said the RM270mil sustainability-linked term loan to Malaren International Sdn Bhd, a subsidiary of Singapore’s StarHub Group, is the bank’s first sustainability-linked loan (SLL) since announcing its SLL offering in January 2020, with a commitment of RM3bil to SLL for corporate borrowers.

KUALA LUMPUR: CIMB Bank Bhd is providing a RM270mil sustainability-linked term loan to Malaren International Sdn Bhd, a subsidiary of Singapore’s StarHub Group.

This is the bank’s first sustainability-linked loan (SLL) since announcing its SLL offering in January 2020, with a commitment of RM3bil to SLL for corporate borrowers.

In a statement issued on Friday, it said the SLL also marks StarHub’s maiden loan linked to sustainability performance targets.

CIMB Bank said sustainability is an integral part of both CIMB and StarHub’s strategy and operations. StarHub Group is a leading Singapore provider of communications, information and entertainment services.

To incentivise environmental transparency and performance, CIMB will grant a rebate against the loan interest based on StarHub’s performance in its annual CDP Climate Change Scores from FY2021 to FY2023.

“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, ” it said.

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 Bank added it aims to steer clients towards adopting responsible business practices through mitigating negative impacts whilst enabling and incentivising positive corporate behaviours.

“Providing this SLL is part of this sustainability approach, which facilitates corporate borrowers who are keen to enhance their sustainability performance in alignment with one or more of the 17 Sustainable Development Goals (SDGs), ” it said.

Gurdip Singh Sidhu, group chief strategy & design officer, CIMB Group, said this was the bank’s first SLL and this 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, ” Gurdip said.

As for StarHub, its commitment and transformation to become a more responsible and sustainable business began in 2008.

StarHub has implemented many sustainable and green practices across the business, including tackling electronic waste (e-waste), reducing energy and water consumption and promoting actions to address climate change while delivering world-class communications, entertainment and digital solutions to consumers as well as corporate and government clients.

Dennis Chia, chief financial officer of StarHub, added: “As we are driving our business to support the growth and development of new services, we are pleased to underpin our commitment in 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 a sustainable business and enhance the performance of the company.”

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