SINGAPORE (June 24): Keppel Infrastructure Trust (KIT) and Keppel Energy (KE), have secured a seven-year $700 million sustainability-linked loan from DBS Bank and OCBC Bank for its jointly owned gas-fired co-generation plant, Keppel Merlimau Cogen Plant.

The sustainability-linked loan, which is the first for KIT and KE, is one of the largest in Singapore. It is also the first such loan for Singapore’s energy sector to date.

The loan is linked to carbon emission targets for Keppel Merlimau Cogen Plant, which include benchmarking of the plant’s carbon emissions intensity against national indices, as well as demonstrating continuous improvement in the plant’s carbon emissions intensity.

If these pre-set targets are met, the interest rate on the facility will be subsequently reduced on a tiered basis.

“Sustainability is an essential part of the Trust’s strategy and operations. Beyond adopting high environmental, health and safety standards for the businesses and assets in our portfolio, we are also strengthening our commitment to sustainability through financing,” says Matthew Pollard, CEO of Keppel Infrastructure Fund Management, the Trustee-Manager of KIT.

“This loan facility will help us to proactively drive best-in-class practices and support the performance of Keppel Merlimau Cogen Plant as we build a sustainable future together with our stakeholders,” he adds.

“Keppel is committed to reducing our environmental impact by focusing on enhancing efficiency and reducing the carbon footprint of our operations. As owners and operators of Keppel Merlimau Cogen, we are constantly looking for ways to optimise operations so that the plant minimises its carbon emissions, while ensuring reliable power generation for Singaporeans,” says Janice Bong, General Manager (Energy Infrastructure) of Keppel Infrastructure, the parent company of KE.

As at 9.07am, units in Keppel Infrastructure Trust are changing hands 0.5 cents lower, or 0.9% down, at 53.5 cents.