ASEAN Briefing, Dec 3, 2020
On November 24, 2020, the Monetary Authority of Singapore (MAS) launched the world’s first grant scheme to support green and sustainability-linked loans (GSLS), which will come into effect from January 1, 2021.
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The GSLS comprises two tracks:
- Support corporations through a grant to defray the expenses of engaging with independent service providers to validate the credentials of the green and sustainability-linked loans; and
- Incentivize banks and other financial institutions to develop sustainability-linked loan frameworks to make such financing more accessible to small and medium-sized enterprises (SMEs), although the GSLS is available to corporations of all sizes.
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The green and sustainability-linked loan frameworks
This track is further divided into two funding tiers; these are:
- The green and sustainability-linked loan frameworks for SMEs and individuals (tier 1) — in this case, MAS will defray up to 90 percent of the expenses incurred by banks to develop frameworks that specifically target SMEs and individuals, although this is capped at S$180,000 (US$134,000) per framework, over a three-year period. The framework is targeted for SMEs or individuals who must have annual revenue of no more than S$100 million (US$74,500,000) and for loan sizes no larger than S$20 million (US$14.9 million).
- Other green and sustainability-linked frameworks (tier 2) — MAS will defray up to 60 percent of other green and sustainability-linked frameworks that fall outside the scope of the frameworks set for SMEs and individuals. This is capped at S$120,000 (US$89,500) over a three-year period.
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