While a green loan is project-specific, SLLs require a commitment towards improvements over a period of time. Borrowers can unlock lower interest payments when they achieve certain sustainability performance targets.
Oversea-Chinese Banking Corporation (OCBC) extended sustainability-linked loans (SLLs) to over 110 small- and medium-sized enterprises (SMEs) in the region last year, more than four times the 24 SLLs recorded in 2023 and up from just one in 2022.
About 80% of the SLLs were extended to firms in Singapore, says Linus Goh, head of global commercial banking, with Malaysia, Hong Kong and Indonesia making up the rest. These firms were most commonly from the manufacturing, services and construction sectors.
