Sembcorp Marine (SembMarine) has, on March 4, secured a sustainability-linked loan that references the Singapore Overnight Rate Average (SORA) from DBS Bank, making it a first in the maritime industry.

The loan was secured through SembMarine’s wholly-owned subsidiary, Sembcorp Marine Financial Services.

The $500 million facility has an interest rate that comprises two components: a compounded daily SORA rate calculated in arrears and an applicable margin.

The loan features interest rate discounts linked to pre-determined Environmental, Social and Governance ESG targets, where SembMarine will enjoy savings in borrowing costs should these targets be met.

In 2019, some $530 million of SembMarine’s projects were related to green solutions including scrubber and ballast water management system retrofits and renewable energy projects.

SEE:Analysts remain cautious on Sembcorp Marine following deepening net losses in FY20

“The inclusion of green financing dovetails with our strategic transformation and pivot since 2015 to provide innovative engineering solutions to the global offshore & marine and energy industries, with a keen focus on cleaner, greener and renewable energy solutions,” says SembMarine’s group finance director William Goh.

“This sustainability-linked financing complements our ongoing efforts to proactively manage the environmental impact of our business,” he adds.

“We believe financial institutions have a strategic and pivotal role to play in proactively supporting industries work towards a lower-carbon future. We remain dedicated and committed in helping our clients navigate and structure their sustainability roadmaps – as the journey is different from corporate to corporate, and from industry to industry,” says Dorian Delteil, DBS’s head of oil and gas.

“Every transitional step will contribute to making an important difference, and we strive to continue engaging with like-minded clients, such as Sembcorp Marine, in making the shift towards more sustainable operations and working towards achieving a net zero emissions economy,” he adds.

Shares in SembMarine and DBS closed flat at 15.4 cents and $27.48 respectively on March 3.