OCBC, UOB provide US$44m green loan to Myanmar conglomerate

THE Yangon branches of OCBC Bank and United Overseas Bank (UOB) have extended a US$44 million green loan to Myanmar’s Shwe Taung Group.

Close to US$30 million of the loan came from OCBC, while UOB provided the balance, according to a joint statement by OCBC and Shwe Taung on Wednesday.

The Myanmar conglomerate’s subsidiary, City Square Commercial Company, will use the green loan to refinance an earlier loan taken out for its Junction City Shopping Centre, OCBC told The Business Times. The previous loan was also from OCBC and UOB.

The mall, which officially opened in 2017, is part of the Junction City mixed-use development in Yangon’s downtown, which also includes an office tower, a Pan Pacific hotel, and serviced residences.

The mixed-use development has green features such as energy-efficient electricity and mechanical systems that lower energy consumption, double-glazed glass windows, and rooftop solar panels. These features reduce energy consumption by about 15 to 20 percent, according to the joint statement.

Junction City also has a self-sustaining waste treatment system that ensures a clean environment for the communities in its vicinity.

The banks extended the green loan after Junction City attained the Green Mark certification by Singapore’s Building and Construction Authority in January this year.

The Green Mark is an internationally recognized certification that has also been attained by developments in other countries such as China, Indonesia, Malaysia, and Vietnam, according to the statement.

Junction City Shopping Centre is the first mall in Myanmar to receive the certification, OCBC and Shwe Taung said.

For the US$44 million green loans, OCBC was the sole green loan advisor, mandated lead arranger, facility agent and security agent.

It was issued under Shwe Taung’s green loan framework in accordance with the Green Loan Principales issued in 2018 by the Loan Market Association and the Asia-Pacific Loan Market Association.

The framework was developed together with OCBC to guide the Myanmar conglomerate’s evaluation of eligible green projects and the management of net proceeds from green financing.

Linus Goh, head of global commercial banking at OCBC, said the transaction “signals an important shift towards sustainability” in Myanmar at a crucial stage of its economic development.

As at 11.06 am on Wednesday, OCBC shares were up S$0.05 or 0.5 percent to S$10.90 while UOB shares advanced S$0.10 or 0.4 percent to S$25.89.

Source: Business Times

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