Malaysia’s CIMB, CIMB Islamic allocate 3 bln ringgit for sustainability-linked loans

Malaysia’s CIMB Bank and CIMB Islamic Bank will allocate 3 billion ringgit ($731 million) for sustainability-linked loans.

The 3 billion ringgit will be allocated to corporate borrowers, CIMB said in a statement on Sunday (Jan 5).

Sustainability-linked loans or financing are similar to other corporate credit facilities except that their interest or profit rates are linked to selected sustainability key performance indicators. These KPIs could be linked to the United Nations’ 17 Sustainability Development Goals (SDGs).  Companies that achieve their sustainability KPIs benefit from favourable interest or profit rates in the form of rebates.

CIMB’s sustainability-linked loans can be channeled to general corporate purposes as well as to ‘green’ projects, said the bank.

Incentives for CIMB’s sustainability-linked loans are available from January 1 to December 31, 2024.

CIMB said its loans are a “catalyst” to urge businesses to embed sustainability considerations in their strategies.

The loans by CIMB are guided by the Sustainability Linked Loan Principles 2019 issued by the Asia Pacific Loan Market Association that advocate best market standards and practices, said the bank.

The principles set out a broad voluntary framework of characteristics based on four core components, which consist of relationship to borrower’s overall sustainability strategy, target setting, reporting and review.

($1 = 4.1042 Malaysian ringgit)

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