DBS : D05 0% has provided a A$207 million (S$180 million) green loan to Retirement Fund (Incorporated) (KWAP) – Malaysia’s largest public sector pension fund.

The loan will be used to refinance a Grade A green office tower in Australia that KWAP owns. It is also the first green loan obtained by the pension fund, the lender said on Tuesday (Nov 28).

The building spans 17 floors and is located at 747 Collins Street in Melbourne, Australia. It has a six-star Nabers (National Australian Built Environment Rating System) energy rating without green power – the highest rating for building energy efficiency in Australia

It possesses sustainability attributes such as rooftop solar panels and a trigeneration system that recycles waste heat from onsite power generation for heating and cooling purposes.

DBS provided the green loan in line with its 2020 sustainable and transition finance framework and taxonomy, and with internationally recognised green loan principles.

Niraj Mittal, DBS Australia’s country head, said: “The built environment sector is ripe for decarbonisation as it accounts for a quarter of all greenhouse gas emissions.”

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He noted that the industry recognises this as the bank has observed growing demand for green finance products from a wide spectrum of organisations and not just real estate companies.

Separately on Monday, DBS announced a new green loan programme with fashion retailer H&M Group that facilitates supply chain decarbonisation in the apparel sector.

The programme allows suppliers access to financing from DBS and technical support from sustainability consultant Guidehouse. It will directly fund factory upgrades to help suppliers improve their energy efficiency and decarbonise.

One example is Indian supplier Raj Woollen, which used the programme to help finance its installation of solar panels, energy-efficient motors, and water conservation technologies to conserve resources and reduce carbon emissions.

“Unlike traditional banking solutions which seek to encourage such green activities indirectly, this programme directly provides financing with highly favourable terms to suppliers for specific greenhouse gas emission reduction activities, as approved by H&M Group,” DBS said in a press statement.

DBS group head of institutional banking Tan Su Shan added: “Accelerating net zero for supply chains requires the rapid scaling of low-carbon technologies and new, innovative financing models to drive adoption. The collaborative finance tool is a prime example of how we can create impact for suppliers.”