SINGAPORE: The Housing & Development Board (HDB) has raised S$1 billion through the issuance of its inaugural green bond, marking its first step into green finance transactions.
The proceeds from the green bond will be used exclusively to finance HDB’s green building projects as guided by its new Green Finance Framework, it said in a news release on Wednesday (Mar 16).
The five-year fixed rate green notes comes under HDB's existing S$32 billion multicurrency medium term note programme. Issued on Tuesday, they have a coupon of 1.845 per cent per annum, payable semi-annually in arrear.
The notes, which are in denominations of S$250,000, are rated AAA by Fitch Ratings and will mature on Mar 15, 2027. The joint lead managers and bookrunners are Bank of China, DBS Bank, OCBC, Standard Chartered and UOB.
For projects to be eligible for financing, the necessary provisions must be put in place right from the design stage.
This is to ensure that they can be rated among the top green building performers in Singapore, said HDB, listing Parc Residences@Tengah and Heart of Yew Tee as examples of eligible projects.
"For a start, HDB has identified 30 eligible projects for our Green Projects Register," it said, adding that it plans to issue at least one green bond each year.
"These are new residential projects which are planned to achieve the Green Mark certification of GoldPlus or higher, and whose construction tender were/will be awarded from financial year 2020 to 2022 (March 2020 to March 2023).
"HDB will review the Green Projects Register annually to keep track of the projects eligible to be financed/re-financed by green bonds/loans."
HDB said the Green Finance Framework and inaugural green bond will support the government's move to intensify sustainable development in Singapore.
"More than just a means of funding building projects, HDB’s entry into green financing underscores our commitment to make every HDB town not only liveable, but also green and sustainable,” said chief executive officer Tan Meng Dui.
Second Minister for National Development Indranee Rajah described HDB's move as "another bold step in sustainability".
"The issuance of green bonds/loans reinforces HDB’s strong commitment to sustainable development and is part of the Singapore Green Plan 2030," she said in a Facebook post.