ABC Impact, an impact investment firm backed by Temasek, has collaborated with DBS and UOB to introduce a sustainability-linked subscription loan facility worth $110m (S$142m). This innovative financial instrument transforms a conventional loan into one that is linked to measurable sustainability performance targets, aiming to channel funds towards projects with significant social and environmental outcomes.
The facility, designed for ABC Impact Fund II, which began in August 2023 and will close in March 2025, boasts assets under management exceeding $600m (S$712m). This is double the size of its inaugural fund, with backing from prominent investors such as Temasek, the Asian Development Bank, and Mapletree Investments.
Under the loan’s terms, portfolio companies must meet targets related to reducing greenhouse gas emissions and benefiting key sectors like agriculture, healthcare, and education. Sugandhi Matta, Chief Impact Officer at ABC Impact, highlighted the significance of this development, stating, “This sustainability-linked loan marks an important milestone in ABC Impact’s journey.”
Simon Ong from DBS noted the partnership’s role in unlocking capital for businesses that deliver both financial and social returns. Meanwhile, Edmund Leong of UOB emphasised the facility’s role in setting a new standard for financing that supports both commercial success and societal progress.
This collaboration sets a new benchmark in the financial sector, integrating sustainability considerations into conventional fund financing and reinforcing the commitment to addressing pressing challenges in Asia.
