KUALA LUMPUR: Sabah Credit Corporation (SCC) has secured an RM100 million sustainability-linked loan (SLL) in the form of a revolving credit facility from CIMB Bank Bhd.
This makes SCC the first statutory body from East Malaysia and the first financial institution in Malaysia to have secured a loan linked to sustainability performance targets (SPT).
Through this SLL, SCC seeks to intensify its efforts to catalyse socio-economic development in Sabah whilst demonstrating its firm commitment towards driving measurable positive impacts in the community.
The SLL has been structured around two key performance indicators (KPI) linked to SCC's sustainability and socio-economic agenda in Sabah, with pre-agreed SPTs linked to each KPI.
The SPTs include the cumulative disbursement of loans/financing to the B40 segment and SCC's contribution to local communities through its corporate social responsibility (CSR) foundation, Yayasan Perbadanan Pinjaman Sabah (YPPS).
CIMB Bank will grant a rebate against the loan interest if SCC achieves these SPTs.
SCC chief executive officer George Taitim Tulas said the agency's maiden SLL from CIMB Bank would support its mission to improve the accessibility of financing facilities to Sabahans and drive socio-economic growth in Sabah.
"The SLL has quantifiable targets which would provide greater transparency on our impact within the state, unlocking value for all our stakeholders.
"This is a significant milestone for SCC and demonstrates our readiness to embrace sustainable financing in driving our developmental agenda within Sabah.
"We will also intensify our efforts to strengthen environmental, social, and governance (ESG) integration across our business, which we are confident will ultimately help SCC to realise our mandate," he said in a statement today.
CIMB Group group chief executive officer Datuk Abdul Rahman Ahmad said as a purpose-driven organisation, this represents the bank's continued focus on incorporating environmental and social considerations into its financing terms.
"This incentivises sustainable practices within the region, thereby creating a win-win-win situation for our business and our clients, as well as people and planet.
"We look forward to working with more clients on sustainable or sustainability-linked offerings in our effort to build a more equitable, sustainable and resilient economy," he said.
In 2021, CIMB Group doubled on its ambition to become an ASEAN sustainability leader by committing to achieving RM30 billion in sustainable finance by 2024.
This target includes its SLL offering, for which CIMB Bank's total SLL issuance has exceeded RM1 billion to date.
In 2021, CIMB Bank was also one of the banks involved in the provision of an SG$540 million SLL to OUE Commercial Real Estate Investment Trust (OUE C-REIT) is a Singapore real estate investment trust.
OUE C-REIT's maiden SLL and CIMB Singapore's first SLL referencing the Singapore Overnight Rate Average (SORA) incorporated interest rate reductions contingent upon OUE C-REIT's achievement of sustainability targets that include improving energy and water efficiencies in their commercial property portfolio in Singapore and Shanghai.
In addition to its sustainable finance commitment, CIMB Group has committed to achieving net-zero greenhouse gas emissions, including financed emissions, by 2050.
In October 2021, CIMB Bank entered into a landmark RM2.45 billion sustainability-linked derivative transaction with targets linked to CIMB Group's sustainability commitments.