The Green and Sustainability-Linked Loan Grant Scheme (GSLS) supports corporates of all sizes to obtain green and sustainable financing by defraying the expenses of engaging independent service providers to validate the green and sustainability credentials of the loan. The grant also encourages banks to develop green and sustainability-linked loan frameworks to make such financing more accessible to small and medium-sized enterprises (SMEs). The GSLS is valid till 31 December 2023.
Grant Details
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.
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 must be 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:
- 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 parties 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.