19 January 2022
The RM100 million revolving credit facility is the first sustainability-linked loan to be provided to a financial institution in Malaysia
Kuala Lumpur: Sabah Credit Corporation (“SCC”) has secured an RM100 million sustainability-linked loan (“SLL”) in the form of a revolving credit facility from CIMB Bank Berhad (“CIMB” or “the Bank”). This makes SCC the first statutory body from East Malaysia and the first financial institution in Malaysia to have secured a loan that is linked to sustainability performance targets (“SPTs”). Through this SLL, SCC seeks to intensify its efforts to catalyse socio-economic development in Sabah whilst demonstrating its firm commitment towards driving measurable positive impacts in the community.
The SLL has been structured around two key performance indicators (“KPIs”) that are linked to SCC’s sustainability and socio-economic agenda in Sabah, with pre-agreed SPTs linked to each KPI. The SPTs include the cumulative disbursement of loans/financing to the B40 segment, as well as SCC’s contribution in local communities through its corporate social responsibility (“CSR”) foundation, Yayasan Perbadanan Pinjaman Sabah (“YPPS”). CIMB will grant a rebate against the loan interest if SCC achieves these SPTs.
Mr George Taitim Tulas, Chief Executive Officer of SCC, said, “SCC is pleased to have secured our maiden SLL from CIMB, which we believe will support our mission to improve the accessibility of financing facilities to Sabahans and drive socio-economic growth in Sabah as we give back to the community. The SLL has quantifiable targets which would provide greater transparency on our impact within the state, unlocking value for all our stakeholders. This is a significant milestone for SCC and demonstrates our readiness to embrace sustainable financing in driving our developmental agenda within Sabah. We will also intensify our efforts to strengthen environmental, social and governance (“ESG”) integration across our business, which we are confident will ultimately help SCC to realise our mandate."
Dato’ Abdul Rahman Ahmad, Group Chief Executive Officer, CIMB Group said, “CIMB is pleased to support SCC’s sustainability and socio-economic agenda through our SLL offering. As a purpose-driven organisation, this represents our continued focus on incorporating environmental and social considerations into our financing terms, incentivising sustainable practices within the region, thereby creating a win-win-win situation for our business and our clients, as well as people and planet. We look forward to working with more clients on sustainable or sustainability-linked offerings in our effort to build a more equitable, sustainable and resilient economy.
In 2021, CIMB Group doubled down on its ambition to become an ASEAN sustainability leader by committing to achieve RM30 billion in sustainable finance by 2024. This target includes its SLL offering, for which CIMB’s total SLL issuance has exceeded RM1 billion to date. In 2021, CIMB was also one of the banks involved in the provision of an SGD540 million SLL to OUE Commercial Real Estate Investment Trust (“OUE C-REIT”), a real estate investment trust in Singapore. As OUE C-REIT’s maiden SLL and CIMB Singapore’s first SLL referencing the Singapore Overnight Rate Average (“SORA”), it incorporated interest rate reductions contingent upon OUE C-REIT’s achievement of sustainability targets that include improving energy and water efficiencies in their commercial property portfolio in Singapore and Shanghai.
In addition to its sustainable finance commitment, CIMB Group has committed to achieve Net Zero greenhouse gas emissions, including financed emissions, by 2050. In October 2021, CIMB Bank entered into a landmark RM2.45 billion sustainability-linked derivative transaction with targets linked to CIMB Group’s own sustainability commitments. Most recently, CIMB Group also achieved the 79th percentile ranking within the global banking industry in the S&P Global Corporate Sustainability Assessment (“CSA”) in 2021, achieving its target of the top quartile by 2024 under its Forward23+ strategic plan three years ahead of target. The S&P Global CSA is used to assess companies for inclusion into the Dow Jones Sustainability Index (“DJSI”).
