The Monetary Authority of Singapore (MAS) launched a grant to help companies validate that loans are green and sustainable in a bid to boost use of green loans.
From 1 January the scheme will help companies pay for independent assessment of the green and sustainability credentials of loans. MAS also said the grant would encourage banks to develop these loans for small and medium sized enterprises.
The grant will pay up to S$100,000 ($75,000) of companies' expenses related to independent sustainability assessments and advice on developing green and sustainability frameworks and targets, obtaining external reviews, and reporting on the sustainability impact of the loan.
To encourage banks to develop green and sustainability-linked loans, MAS will pay up to 60% of the cost of getting assessments, advice and reporting services, up to S$120,000 ($89,000).
MAS will also pay for 90% of banks' expenses in relation to loans targeted at companies in small and medium size and individuals, capped at S$180,000 ($134,000).
The grant part of MAS' green finance action plan, which also includes $2 billion of funding to support green finance announced in 2019. MAS has released seven sustainable finance initiatives up to now.
Nicholas Hanna, an expert at Pinsent Masons, the firm behind Out-Law, said, "Singapore has yet again taken the lead in championing a new financial product to support green and sustainability frameworks. This will be welcomed by companies promoting clean energy in the region. Singapore’s new incentive scheme will no doubt attract businesses which are seeking to establish a hub here and I can see applications from a number of my clients in wind, solar and bio mass being interested."
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