Singapore-based Sembcorp Financial Services (SFS), a unit of Sembcorp Industries, has signed a five-year S$1.2 billion (US$864 million) syndicated sustainability-linked revolving credit facility.

It has been described as the first and largest Singapore Overnight Rate Average-based syndicated sustainability-linked loan facility for an energy company in Southeast Asia.

The loan is fully underwritten and arranged by Australia and New Zealand Banking Group, DBS Bank, and Oversea Chinese Banking Corporation (OCBC), each acting as a mandated lead arranger and bookrunner. ANZ is the lead sustainability coordinator, with DBS Bank and OCBC as joint sustainability coordinators.

The facility will be used for general corporate purposes and financing/ refinancing of the group’s renewable energy and other sustainable projects. To date, Sembcorp has raised S$2.9 billion of funding from green and sustainable financing and refinancing to support the group’s brown-to-green transformation strategy.

The facility is guaranteed by Sembcorp, and is subject to margin adjustments tied to pre-agreed sustainability performance targets (SPTs), which are in line with the Sembcorp Sustainable Financing Framework. The company is targeting net-zero emissions by 2050.

The interest rate of the facility will be subject to a step-up margin if certain SPTs are not achieved by December 31 2025. These comprise greenhouse gas emission and installed renewable energy capacity targets.