MAS unveils loan grant to help corporates obtain green financing

The grant offers up to $180,000 coverage of expenses.

The Monetary Authority of Singapore (MAS) has launched the Green and Sustainability-Linked Loan Grant Scheme (GSLS), which seeks to support corporates of all sizes to obtain green and sustainable financing.

The grant, which takes effect beginning 1 January 2021, offers up to $180,000 coverage of expenses for corporates to engage independent service providers to validate the green and sustainability credentials of their loans.

First, to enhance corporates’ abilities to obtain green and sustainability-linked loans, MAS will defray up to $100,000 of expenses per green and sustainability-linked loan.

Also, to encourage banks to develop frameworks for green and sustainability-linked loans, the grant will cover up to 60% of expenses incurred by banks related to the framework, capped at $120,000 for such green and sustainability-linked loan frameworks.

MAS also hopes that the grant will encourage banks to develop green and sustainability-linked loan frameworks to make such financing more accessible to small and medium-sized enterprises (SMEs) by offering to cover up to 90% of expenses incurred by banks to develop frameworks specifically targeted at SMEs and individuals, capped at $180,000 per framework.

Apart from grants, MAS will also expand the scope of the existing Sustainable Bond Grant Scheme (SBGS) to include  sustainability-linked  bonds,  effective  immediately. Beyond  grant support for pre-issued costs which have been covered by SBGS since 2017, the enhanced SBGS will now also cover the  post-issuance costs of engaging independent sustainability assessment and advisory service providers to obtain external reviews or report for bonds under the scheme.

Accompanying the launch of the GSLS, BNP Paribas, OCBC and UOB have introduced green and sustainability-linked loan frameworks that will qualify for the scheme, MAS announced.

These banks’ frameworks feature standardised criteria and processes, which will reportedly streamline assessments of green and sustainable lending to corporates, and support the banks’ clients—including both  SMEs  and large corporates—in financing projects related to green projects and sustainability, the regulator noted.