National University of Singapore raises S$300 million in its inaugural green bond issuance

The National University of Singapore (NUS) has successfully raised S$300 million through a green bond, the first of its kind among universities in Asia. With a fixed coupon rate of 1.565 per cent, the 10-year notes will mature in 2030. DBS Bank is the sole lead manager and bookrunner for the deal.

The bond proceeds will go towards financing green projects. NUS’ new Green Finance Framework provides the overarching criteria and guidelines for the University to enter into green finance transactions, such as green bonds and loans. The Framework was conceptualised with valuable inputs from the NUS University Campus Infrastructure cluster, which oversees the sustainable planning, development and operations of campus infrastructure at NUS’ campuses.

NUS is believed to be the first university in Asia to launch such a framework on sustainability-linked finance, and to issue a green bond.

“Tackling the climate change crisis is one of the biggest global challenges. This green bond, and our new Green Finance Framework, will enable us to play an active role in addressing the growing crisis. We are upholding our commitment to build a more sustainable future,” said NUS President Professor Tan Eng Chye.

Mr John Wilton, NUS Deputy President (Administration and Finance), added, “The strong demand that we have seen in our first green bond not only reflects investors’ trust in NUS as an issuer, but also the rise of the green financing sector.”

Ratings agency Moody’s Investors Service has recently completed a periodic review and maintained NUS’ Aaa rating, the highest possible rating in assessing credit-worthiness. The rating reflects the University’s robust institutional framework, its flagship status in Singapore, its premier academic reputation, a sizeable endowment, and its well-developed governance practices.

Supporting green projects

As an extension of NUS’ commitment towards sustainability, the Green Finance Framework was prepared with the intention for the University to enter into green finance transactions – including its first green bond. These transactions will be used to fund a strong pipeline of eligible projects with clear environmental benefits.

The green projects defined in the Framework are aligned to five focus areas:

Green buildings or precincts;
Renewable energy and energy efficiency infrastructure;
Sustainable water and wastewater management;
Pollution prevention and control; and
Sustainable management of natural resources and land use.
“The Green Finance Framework augments the University’s existing work to carry out cross-disciplinary research for a better and more sustainable future for Singapore and the world. The Framework facilitates collaborations between academia and industry to translate research into solutions for real-world problems,” said Professor Tan.

OCBC Bank acted as Green Finance Advisor in the preparation of the Framework, which was drawn up in line with the relevant international principles and guidelines1. Ernst & Young performed a limited assurance in accordance with ISAE 30002 and has confirmed that the Framework has been properly prepared, in all material respects, in accordance with the Principles.

Promoting environmental sustainability

NUS is committed to making a positive impact on the environment through education, research, operations, planning, construction, and engagement. It has laid out the NUS Sustainability Strategic Plan 2017-2020 which sets out a multi-faceted approach for the University to achieve its sustainability goals. The University is in the midst of developing the next phase of its sustainability strategy, to build on the progress made to-date.

As part of its pledge to cut carbon emissions by 23 per cent below business-as-usual by 2020, NUS launched Singapore’s first new-build net-zero energy building, the SDE4, last January. SDE4 features sustainable building designs such as solar roof installations, a hybrid cooling system, innovative ventilation systems, and architectural structures that provide much-needed shade in Singapore’s tropical climate. Two other buildings – SDE 1 and SDE 3 – are currently undergoing renovation to be repurposed into super low energy buildings.

The new Techno Edge Canteen, which is under construction at the NUS Faculty of Engineering, will also be a super low energy building. The 1,000-seater canteen will join SDE 1, SDE 3 and SDE 4 to create a green precinct. There are plans to build more green buildings in the vicinity to expand the precinct, as it grows to provide a model for sustainable development.

In addition, the University has set up the NUSustainability Cluster, which brings faculty members, students and staff together to address sustainability challenges. A new research centre that will focus on harnessing nature to tackle climate change is in the works to be set up this year.

For more information on the Green Finance Framework, please visit https://nus.edu/2XBdDtp