ASEAN’s largest banks go big on green real estate (NIKKEI Asia)

Southeast Asia’s largest banks are rushing to finance building projects tied to sustainability, even as the world’s most indebted property developer, China Evergrande, sends chills through the country’s real estate sector.

The region’s biggest names, including Singapore’s DBS Group Holdings, Oversea-Chinese Banking Corp. and United Overseas Bank, as well as Malaysia’s Malayan Banking, are jostling to support projects that incorporate environmental, social and governance objectives.

ESG goals are meant to hold companies to certain ethical standards in their business activities, for instance, ensuring that the environmental impact of a construction project is minimized from inception to completion.

In Thailand, Asia Capital Real Estate, a private equity firm with offices in New York and Singapore, is developing an environmentally friendly rental apartment complex in Phuket. The 505-unit project boasts features such as solar panels and energy-efficient appliances.

Designed to meet green building standards set by the International Finance Corporation, a World Bank subsidiary, the project aims to achieve a more than 40% reduction in energy and water use compared with a conventional building.

It has received a 675 million baht ($20 million) green loan from UOB Thailand for construction. Under the terms of the loan, the bank will record and monitor the borrower’s management of funds, as well as track sustainability metrics agreed upon with the company.

“Local communities will benefit from facilities that are environmentally friendly, and which promote the well-being of residents,” said Andy Cheah, managing director and country head of wholesale banking at UOB Thailand, on the project’s expected ESG outcomes.

This article originally appeared on NIKKEI Asia. You can view the original article here:


20 October 2021