Gamuda Partners OCBC Bank For Its First Islamic ESG Linked Financing Of RM550 Million

Gamuda Berhad has partnered with OCBC Bank Malaysia for its inaugural Shariah-compliant sustainability-linked financing facility for the group’s maiden ESG-linked holistic financing solution totaling up to RM550 million.

In a statement today, Gamuda said, “the inking of this holistic sustainable financing with OCBC Malaysia is a major milestone for the Group, aligned with its Gamuda Green Plan 2025 (GGP 2025) roadmap. The Group is looking forward to this partnership which further reinforces the Group’s sustainability agenda, particularly its commitment to reducing carbon emissions. Decarbonising the construction industry is challenging, but it is urgent, and a coordinated effort between the industry players and financial institutions is more urgent than ever before”.

Under the GGP 2025, Gamuda is committed to a structured, accountable approach to decarbonisation, with clear internal targets and parameters in place. In addition, Gamuda is committed to the Science Based Target initiative (SBTi) and an official supporter of the Task Force on Climate-Related Financial Disclosures (TCFD) that focuses efforts on net-zero emissions by 2050.

In support of Gamuda’s sustainability roadmap, specific Sustainability Performance Targets (SPTs) have been structured into the Facilities to spur the Group toward an annual reduction of its scope 1 & scope 2 greenhouse gas (GHG) emissions and increase the cumulative usage of renewable energy for the Group’s operation in Malaysia.  Sustainability-linked financing features a variable interest rate adjustment mechanism predicated on achieving the predetermined SPTs. Hence, the Facilities will have the effect of aligning the dual corporate goals of achieving value maximisation and the realisation of Gamuda’s ESG aspirations.

The Facilities are structured to be aligned with the “Sustainability-Linked Loan Principles” published by the International Capital Market Association (ICMA), Asia Pacific Loan Market Association (APLMA) and the Loan Syndications and Trading Association (LSTA).

Ms Tan Ai Chin, Managing Director, Senior Banker and Head of Investment Banking, OCBC Bank (Malaysia) Berhad, said: “This ESG-linked financing solution would create yet another new benchmark in Malaysia especially given that it embeds the Islamic principles of value-based intermediation financing with an added feature of a derivative solution to effectively manage financial risks. This holistic sustainable financing solution would serve to appropriately address Gamuda’s funding requirements to propel its ESG agenda further.  

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