KUALA LUMPUR: There is increasing demand for green asset financing, emphasising the importance of addressing climate impact and sustainability concerns, according to Hong Leong Bank Bhd's (HLB) top executive.
"It also reflects a growing awareness that sustainable business practices are not just the right thing to do but also essential for long-term economic viability and environmental stewardship," said HLB Group managing director and chief executive officer Kevin Lam.
Lam emphasised the bank's commitment to sustainable finance as well as its role in addressing climate change and sustainability concerns.
The bank intends to broaden its collaboration with Cagamas Bhd, to include other types of financing.
HLB, Hong Leong Islamic Bank (HLB), and Cagamas recently completed a RM300 million green housing loan and financing transaction.
The transaction was funded, according to the parties, by the issuance of Cagamas's one-year Asean Green Bond worth RM210 million and the one-year Asean Green Sustainable and Responsible Investment (SRI) sukuk worth RM90 million under the national mortgage corporation's RM60 billion.
These issuances are Malaysia's first corporate venture into green housing loans and financing.
Green residential properties and buildings that meet the eligibility criteria defined by GreenRE and Green Building Index (GBI) certifications are included in the green housing assets.
In Malaysia, GreenRE Certification is a tool for green building certification, whereas GBI is a recognised rating system for buildings that promote sustainability in the built environment.
The parties pledged to support the growth of green housing and the transition to a low-carbon economy.
According to Cagamas president and CEO, Kameel Abdul Halim, the purchase of these green assets not only benefits the environment but also strengthens Cagamas' essential role in the facilitation of liquidity within a developing green capital market.
"This practical step underlines our continued efforts as an intermediary in the secondary market, helping to support industry-led green initiatives to achieve their sustainability agenda," he said.
Under its RM60 billion conventional/Islamic medium term notes programme, Cagamas has issued a total of RM2.9 billion in sustainability-related bonds and sukuk.
"As we mark this significant milestone, we hope to broaden our involvement in the green bond/sukuk market and anticipate sustained momentum to pave the way for a more impactful and continued supply of green bond/sukuk issuances," he added.