It is the first South-east Asian bank to tap the People’s Bank of China’s carbon emission reduction facility programme.

DBS in a tie-up with Envision Energy announced a 500 million yuan (US $70.5 million) green loan facility for the wind turbine provider to develop a 100-megawatt wind turbine farm in Henan province, in north-eastern China.

When completed, the project is expected to generate about 270 gigawatt hours of renewable energy. This can power 90,000 households and reduce annual carbon emissions by 212,600 tonnes.

The loan will be issued under the People’s Bank of China’s (PBOC) carbon emission reduction facility, and is the first transaction in this programme by a South-east Asian bank.

The programme enables participating banks to offer low-cost loans to fund sustainable development projects in China across sectors such as clean energy, environmental protection and carbon emission reduction technologies, among others.

As at end-June this year, participating banks have extended over 547 billion yuan in loans.

Kelvin Wong, head of energy, renewables and infrastructure, at DBS’ institutional banking group, noted that the energy sector accounted for almost 90 per cent of China’s greenhouse gas emissions.

The programme could reduce the cost of capital for green projects amid the country’s goal to achieve carbon neutrality by 2060, Wong added.

“This will help Envision Energy expand clean energy capacity, reduce carbon emissions, and contribute to the achievement of the ‘dual-carbon’ goals,” DBS China chief executive Ginger Cheng said of the latest green facility loan.

DBS China served as the sole green finance adviser for this loan to ensure compliance with the China-European Union Common Ground Taxonomy.

As at end-2023, its green financing portfolio had grown 62 per cent year on year.