YTL Power’s maiden foray into ESG project financing
Malayan Banking Berhad and OCBC Bank (Malaysia) Berhad announced today that they are the joint mandated lead arrangers for a RM1.10 billion Islamic term financing facility granted to YTL DC South Sdn Bhd (YTL DC), a wholly owned subsidiary of YTL Power International Berhad (YTL Power). The transaction signifies YTL Power’s ongoing commitment towards transitioning to a green and circular economy while contributing to its environmental objectives of climate change mitigation and the promotion of green buildings.
The facility was emplaced to fund the development of the 48MW IT Load Hyperscale Data Center (HDC) located at Kulai, Johor with a commitment to secure Gold LEED certification which shall be in compliance with Green Loan Principles published by Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications and Trading Association. The Islamic syndicated term financing facility is based on the Shariah principles of Commodity Murabahah.
The 48MW HDC is part of YTL Power’s plans to develop Malaysia’s first 500MW green data centre park in Kulai, Johor to be integrated with on-site solar photovoltaic power which aims to provide data storage colocation services to clients looking for more sustainable and lower carbon solutions within Southeast Asia (Green Data Center Park). The Green Data Center Park serves as the foundation for achieving YTL Power’s greater objective of carbon neutrality for its data centres across the SEA region.
Dato’ Yeoh Seok Hong, Managing Director of YTL Power International Berhad, said, “Our focus on building up our new regional green data center business, solar power generation capabilities and other renewable energy solutions is a natural evolution of YTL Power’s growth and development. The YTL Green Data Center Park is a cornerstone project and we are pleased to partner Maybank and OCBC on this landmark venture.”
Dato' Muzaffar Hisham, Group Chief Executive Officer, Global Banking, Maybank, said, “As one of the key relationship banks to YTL, we are pleased to extend our banking support towards YTL’s first green financing facility in an effort to assist in the YTL Group’s sustainability agenda for a low carbon and climate resilient transition which shall accelerate YTL’s aspirations of achieving carbon neutrality by 2050. This transaction further embodies our M25+ strategy to amongst others, prioritise customer centricity and mobilise RM50 billion in sustainable financing by 2025. We are proud to be partnering with YTL in their transition towards a sustainable economy”.
Ms Tan Ai Chin, Managing Director, Senior Banker and Head of Investment Banking, OCBC Bank (Malaysia) Berhad said, “OCBC has been a prime mover in pioneering various sustainable financing initiatives in the Malaysian capital markets and we are pleased to have the honour of working with YTL, a leading international conglomerate, in structuring and lead arranging its first green financing which signifies YTL’s commitment to a sustainable circular ecosystem. As a responsible financial partner, OCBC Malaysia is pleased to be able to facilitate and support the increasingly widespread acceptance of sustainable finance among Malaysian corporates in building a sustainable and habitable future. As part of our allegiance towards advocating sustainable finance, OCBC has doubled up our sustainable financing target to S$50 billion as compared to a previous set target of S$25 billion to be achieved by 2025. This comes after OCBC’s remarkable achievement of surpassing the initial target with a total S$34 billion sustainable financing in 2021.”