MUFG Bank (Malaysia), a subsidiary of Mitsubishi UFJ Financial Group (MUFG), has completed the first Islamic green trade finance facility for Sime Darby Motors (SDM) – a US$50 million transaction consisting of two tranches of US$25 million each.
The transaction marks the first sustainable finance issuance for the Malaysia-headquartered regional automotive company and the bank’s first Islamic green trade finance facility, underscoring its ability, it says, “to develop breakthrough banking solutions that are fully aligned with Shariah financing principles and tailored to clients’ sustainability strategies”.
The bank’s facility comprises Shariah-compliant working capital and trade products that are aligned with the eligible green projects set out in the Green Loan Principles and in accordance with Bank Negara Malaysia’s guidelines .
In line with SDM’s long-term strategy of enhancing its green vehicle portfolio, the proceeds of this transaction will be used for working capital needs related to electric vehicles and parts as well as other green-related requirements.
The bank has provided support to the broader Sime Darby Group across all major operating regions, including Oceania and East and Southeast Asia over the last two decades.
“MUFG is unwavering in its focus on developing innovative sustainable finance solutions across different sectors to effect a just and equitable transition across Asia, and our partnership with SDM on this facility reinforces this commitment,” says Colin Chen, the bank’s head of ESG finance for Asia-Pacific. “This transaction’s unique structure further aligns SDM’s financing programme with their goal of greening their vehicle portfolio.”