DBS picked by PBOC to join CERF

DBS Bank (China) Limited (DBS China) has become the first Southeast Asian bank to be chosen by the People’s Bank of China (PBOC) to participate in its Carbon Emission Reduction Facility. This program will allow China’s central bank to extend low-cost funding to DBS China, which will enable it to offer low-cost loans to finance sustainable development projects in several key sectors such as clean energy, energy saving, environmental protection, and carbon emission reduction technologies.

China has set ambitious net-zero targets, aiming to peak carbon emissions before 2030 and achieve carbon neutrality before 2060, making it the world’s largest energy consumer and carbon emitter. Achieving these goals requires substantial investments and support of green projects.

Under the programme, the PBOC will provide financial institutions with funds equivalent to 60% of a loan’s principal at an annual interest rate of 1.75%. Financial institutions will also be guided to provide carbon emission reduction loans to enterprises in key areas of decarbonisation based on independent decision-making and risk-taking. Loans worth over RMB 400 billion were made through this policy tool as of September 2022. In January 2023, the PBOC announced that the initiative will continue until the end of 2024, with select local and foreign financial institutions being allowed to participate in the program.

DBS Bank (China) Limited CEO Ginger Cheng expressed her honour for DBS to be the first Southeast Asian bank selected to support China’s green transition. Cheng stated that DBS’s participation in the central bank’s carbon reduction facility would allow it to boost direct financing towards lower-carbon activities, which in turn can help speed up China’s green transition.

Customers of DBS China can leverage the bank’s expertise in green financing, which includes green loans, sustainability-linked loans, sustainable development bonds, socially responsible bankers’ acceptances, and sustainable trade finance. Companies can also utilise the bank’s suite of digital tools, innovation, and ESG (environmental, social, and governance) capabilities to hasten their green transformation.