Schemes and Initiatives
Published Date: 19 January 2021

Green and Sustainability-Linked Loans Grant Scheme

Overview

MAS’ Green and Sustainability-Linked Loan Grant Scheme (GSLS) aims to support corporates in accessing financing as they invest in green projects, and move towards more sustainable business models. The first of its kind globally, the GSLS supports corporates of all sizes to obtain green and sustainable financing by defraying the expenses of engaging independent sustainability advisory and assessment service providers to validate the green and sustainability credentials of the loan. The grant also supports banks in developing green and sustainability-Linked Loan frameworks to make such financing more accessible to all corporates, including small and medium-sized enterprises (SMEs).

Green loans are loans whose proceeds can only be used for green equipment or projects. Sustainability-Linked Loans do not restrict use of proceeds; instead, borrowers commit to sustainability performance targets, and are awarded a reduction in the loan interest rate if their sustainability targets are met. The GSLS defrays the costs of engaging sustainability advisory and assessment services under two tracks: (A) Green & Sustainability-Linked Loans, and (B) Green & Sustainability-Linked Loan Frameworks. Find out about the scheme details, including qualifying criteria, eligible expenses and application process below.

The GSLS is valid till 31 December 2023.

 

See also:

Grant Details

Table A: Green Loans & Sustainability-Linked Loans (SLL)

Grant Criteria Details
Qualifying Borrower
  • Company or financial institution based onshore or offshore
    (Includes international organisations, such as the International Finance Corporation or World Bank, but excludes sovereigns.)
Qualifying Loan

A Qualifying Loan needs to meet the following criteria:

  • Loan tenure of at least 3 years
  • Loan size of at least S$20 million (or equivalent in another currency)
  • New green loan or SLL (excludes refinancing of existing loans already supported by the grant)
Frequency
  • The Qualifying Borrower may apply for the grant each time there is a Qualifying Loan

External review requirements

 

(External review refers to a Second Party Opinion, verification, certification or rating)

Green Loan

At pre-origination of loan:
  • External review to demonstrate alignment of the loan with internationally-recognised green loan principles
 Sustainability-Linked Loan At pre-origination of loan:
  • External review to demonstrate (i) alignment with internationally-recognised Sustainability-Linked Loan principles, and that (ii) minimally 2 of the total SPTs need to contribute to environmental objectives of the UN Sustainable Development Goals or Sustainability Linked Loan Principles
  • Alternatively, the borrower can attain an ESG evaluation score

In addition, Qualifying Borrowers must fulfil the following requirement post-origination:

  • External review (on an annual basis, for the 3-year funding period) to verify the attainment of the Qualifying Borrower’s SPTs
  Bank Requirements
  • More than 50% gross revenue from the loan is attributable to the bank in Singapore (which should be a Financial Sector Incentive (FSI) recipient)
  • Sustainability advisory and assessment work of the loan to be performed in Singapore

    Note: Assessment work refers to evaluating the eligibility of projects and reviewing the allocation of proceeds for green loans based on information reported by the borrower. For SLLs, this includes identifying or assessing SPTs and reviewing the borrower’s actual performance against these SPTs
Sustainability Advisory and Assessment Work More than 50% of the gross revenue from the sustainability advisory and assessment services must be attributable to Singapore-based service providers

 

Note: Sustainability advisory and assessment service providers includes entities that provide services such as the development of loan frameworks and SPTs, external review, second party opinion, verification, certification, rating, advisory, and reporting.

 Qualifying Expenses Costs incurred in engaging sustainability advisory and assessment service providers include the following:
  • Development of a loan framework or Sustainability Performance Targets (Loan Frameworks can include development of new loan frameworks or enhancement of corporates’ existing framework. For instance, corporates may seek to update their loan framework to reflect new market guidance, or to expand type of projects or activities it wishes to fund through its green and sustainable financing)              
  • Pre-and post- loan origination external review (SPO, verification, certification, rating) based on internationally-recognised green and/or Sustainability-Linked Loan principles
  • Attaining an ESG evaluation score
  • Reporting on the use of proceeds of the loan and their expected impact, or SPT achievement and impact
 Per loan cap Cap of S$100,000 per loan over a 3-year period
 Funding period Funding period of three years from the applicant’s first eligible claim

 

Note: For clarity, applicants with loans originated from 1 October 2020 onwards can apply for the scheme from 1 January 2021 onwards. Applicants need to submit applications no later than 3 months from the date of loan origination.

 


Table B: Green & Sustainability-Linked Loan Frameworks

 
Grant Criteria Details
Qualifying Borrower
  • Financial Sector Incentive (“FSI”) company In Singapore
Qualifying Framework

A Qualifying Framework is defined as:

  • Green & Sustainability-Linked Loan frameworks which include green loans and/or Sustainability-Linked Loans (excludes enhancements of existing frameworks already supported by the grant)
  • Green & Sustainability-Linked Loan Frameworks for SMEs & Individuals are defined as frameworks for (i) individuals or firms with annual revenue of up to S$100 million, and (ii) loan sizes less than S$20 million
Frequency
  • Qualifying Institutions may apply for the grant each time they have a Qualifying Framework
 

External review requirements

 

(External review refers to a Second Party Opinion, verification, certification or rating)

At pre-origination of framework:
  • External review to demonstrate its alignment with internationally-recognised green or Sustainability-Linked Loan principles, or creation of the framework in consultation with sustainability advisory and assessment service providers where the framework is aligned with internationally-recognised green or Sustainability-Linked Loan principles

In addition, Qualifying Institutions must fulfil the following requirements post-origination:

  • External review (on an annual basis, for the 3 year funding period) to demonstrate continued alignment of the framework with internationally-recognised green or Sustainability-Linked Loan principles
Bank Requirements
  • Sustainability advisory and assessment work of the loans originated from the framework to be performed in Singapore. 
    Note: Assessment work refers to evaluating the eligibility of projects and reviewing the allocation of proceeds for green loans based on information reported by the borrower. For SLLs, this includes identifying or assessing SPTs and reviewing the borrower’s actual performance against these SPTs               
  • Design and conceptualisation of the framework must be performed in Singapore
Sustainability Advisory and Assessment Work

More than 50% of the gross revenue from the sustainability advisory and assessment services is attributable to Singapore-based service providers

 

Note: Sustainability advisory and assessment service providers include entities that provide services such as the development of loan frameworks and SPTs, external review, second party opinion, verification, certification, rating, advisory, and reporting

Qualifying Expenses

Pre- and post-framework origination costs incurred in engaging sustainability advisory and assessment service providers include: s

  • Development of a green or Sustainability-Linked Loan framework
  • External review (SPO, verification, certification) done on the framework based on any internationally-recognised green or Sustainability-Linked Loan principles
  • Reporting on the green or Sustainability-Linked Loan framework, loans financed and their expected impact
Per framework cap
  • Green & Sustainability-Linked Loan Frameworks for SMEs and Individuals: 90% co-funding capped at S$180,000 of total costs, over a period of 3 years

  • Other Green & Sustainability-Linked Loan Frameworks: 60% co-funding capped at S$120,000 of total costs, over a period of 3 years

Funding period

Funding period of three years from the applicant’s first claim

 

Note: For clarity, applicants with frameworks launched from 1 October 2020 onwards can apply for the scheme from 1 January 2021 onwards. Applicants need to submit applications no later than 3 months from the date when the framework was launched.

 

 

How to Apply

Interested applicants can write to fsdf@mas.gov.sg to obtain the application form or for more information.

Applicants should submit their applications no later than 3 months after the origination date.