HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) has approved two sustainability-linked loans totaling NT$450 million (US$15.55 million) for Taya Group (大亞集團) and Sinbon Electronics Co (信邦電子), the bank said yesterday, adding that interest rates would fall if the borrowers’ sustainability performance improves.
Those marked the first sustainability-linked loans granted by HSBC Taiwan, it said.
While HSBC Taiwan has experience providing green loans for the nation’s developers of renewable energy sources to support their projects, the bank began focusing on sustainability-linked loans to meet rising demand from companies in other sectors planning to undertake sustainability programs, it said.
“As we reward our clients who reach their goals of sustainability development with special incentives, such as lower interest rates, many clients are more interested in taking out sustainability loans instead of regular corporate loans,” commercial banking head Stanley Hsiao (蕭仲程) told the Taipei Times by telephone.
HSBC Taiwan discusses their targets with the borrowers before approval, and assigns independent institutions to review and check if the borrowers meet their targets the following year, the bank said.
Taya Group, an electrical wire and cable provider that is expanding into the green energy sector, aims to use the loans to increase its solar power generation and reduce greenhouse emissions annually, and build a photovoltaic power plant in Tainan, the bank said.
Given that Taya would sell electricity to state-run Taiwan Power Co (台電), the bank would review the utility’s documents to confirm that Taya’s power generation rises next year, it said.
Sinbon, which produces cables, connectors and modems, aims to deepen its operations in the green energy sector by providing more key components to solar and wind power developers, and electric-vehicle companies, it said.
HSBC Taiwan said it would reduce the interest rate on Sinbon’s loan if the revenue generated from the sale of green energy-related products account for a greater share of the company’s overall sales and if its corporate social responsibility performance rises.
The companies took out the loans for terms of one to two years, the bank said, adding that an interest rate reduction could happen next year at the earliest.
However, they must first pass examinations by a third-party institution, such as France-based EcoVadis SAS, it said.
Receiving a sustainability-linked loan has been an important step for Taya to help improve its environmental, social and governance performance, Taya chairman Ryan Shen (沈尚弘) said in a statement.
Sinbon has been investing in green energy over the past three years and the loan is an opportunity to highlight its sustainability agenda, chairman Joseph Wang (王紹新) said.
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