City Developments Limited (CDL), a Singapore-listed real estate developer, has secured a three-year £200 million (US$253.54 million) sustainability-linked revolving credit facility from OCBC.

It becomes the first corporate to obtain the bank’s “1.5°C loan”, with interest rate incentives pegged to annual decarbonization performance targets. CDL will use the facility for refinancing, general corporate funding, and working capital purposes.

With the latest financing, CDL has secured around S$6 billion (US$4.49 billion) of sustainable financing in the form of a green bond, various green loans and sustainability-linked loans. It says it was the first Singapore-based company to launch a green bond in 2017.

In launching the 1.5°C loan earlier this year, OCBC aims to incentivize corporates to set and work towards clear carbon emissions reduction targets aligned with internationally recognized, science-based net-zero decarbonization pathways for their respective sectors. When the annual targets are met or exceeded, corporates will get a reduced interest rate on their loans. The reference pathways, developed by autonomous global organizations, are geared towards achieving a net zero level of greenhouse gas emissions (GHG) by 2050 to limit global warming to 1.5°C above pre-industrial levels.

The sustainability-linked loan is aligned with CDL’s commitment to achieve operational net zero by 2030 for its new and existing wholly-owned assets and developments under its direct operational and management control, with the entire portfolio achieving operational net zero by 2050.

As part of the loan terms, CDL will enjoy interest rate reductions upon meeting the pre-agreed annual decarbonization performance targets, in line with CDL’s Science Based Targets initiative (SBTi)-validated targets of a reduction in GHG emissions intensity by 63% per square metre leased area (Scope 1 and 2), 41% per square metre gross floor area (Scope 3 GHG emissions from purchased goods and services), and 58.8% including hotels managed by CDL’s wholly-owned hotel subsidiary, Millennium & Copthorne Hotels Limited (Scope 3 GHG emissions from investments), against its 2016 baseline, by 2030.

In 2022, CDL achieved a 24% reduction in carbon emissions intensity, against its baseline year. It achieved a 10% reduction in total operational carbon emissions across all its business operations in Singapore compared to 2021 as well as a 22% reduction in embodied carbon of building materials compared to the conventional equivalents.