Sembcorp Marine clinches $500m sustainability-linked loan from DBS

This is reportedly the first SORA-based, sustainability-linked loan in Singapore's maritime industry.

Sembcorp Marine, through its wholly owned subsidiary Sembcorp Marine Financial Services, has secured a $500m sustainability-linked financing facility referencing the Singapore Overnight Rate Average (SORA) from DBS.

In a press release, Sembcorp Marine said the facility is the first SORA-based sustainability-linked loan for the maritime industry.

The loan’s interest rate comprises two components: a compounded daily SORA rate calculated in arrears, and an applicable margin.

The loan also features interest rate discounts linked to pre-determined environmental, social and governance (ESG) targets. As these ESG targets are achieved, Sembcorp Marine will enjoy savings in borrowing costs.

In 2019, Sembcorp Marine said that $530m of its projects were related to green solutions including scrubber and ballast water management system retrofits, and gas and renewable energy projects.

Sembcorp Marine has also introduced more green features in its operations, such as partially replacing its grid-supplied electricity with energy from the solar-roof installed at its steel fabrication facility at its Tuas Boulevard Yard in 2019. The solar source reportedly generated more than 5,000 MWh of electricity, enabling Sembcorp Marine to avoid emissions of approximately 2,100 tonnes of carbon.