OCBC Al-Amin Bank Berhad has extended a USD175 million Islamic green term financing facility to RHB Islamic Bank Berhad (RHB Islamic) making it the first bank to offer a green Islamic foreign currency and bank-to-bank term financing facility.
The facility is also the first to feature a pioneering Islamic term financing using the use-of- proceeds approach in the financial institutions space in Malaysia. RHB Islamic will use the green Islamic financing facility to provide its customers with end-to-end ESG financing solutions in alignment with RHB Banking Group’s sustainable asset framework.
The “Islamic green term financing” pertains to financing that adheres to Shariah requirements and promotes bank-to-bank green financing that utilises the use-of-proceeds method in applying financing proceeds directly to targeted economic segments in an environmentally and socially responsible manner. The term financing is embedded with an Islamic cross-currency swap arrangement, which provides a Shariah-compliant hedging mechanism that protects against currency market fluctuations.
