SUSTAINABLE FINANCING
Asean capital markets have responsibility to support sustainable growth, says SC chairman
PERMODALAN Nasional Bhd will adopt the Asean Green Bond Standards to finance the construction of the iconic Warisan Merdeka tower in Kuala Lumpur. This comes as green investment schemes start to gain traction in the capital market.
PERMODALAN Nasional Bhd (PNB) will adopt the Asean Green Bond Standard (AGBS), which was launched yesterday in conjunction with the Asean Capital Markets Forum (ACMF).
PNB’s wholly owned subsidiary, PNB Merdeka Ventures Sdn Bhd, will be the first issuer in the region to adopt AGBS to finance the construction of the Warisan Merdeka Tower.
Securities Commission (SC) chairman Tan Sri Ranjit Ajit Singh said green financing and investment schemes was gaining strong traction and would catalyse momentum in the capital markets.
“Asean must grow in a responsible and sustainable manner. Growth cannot come at the expense of our future generations.
“We need to support efforts to protect the environment, and the AGBS will help in the allocation of resources towards more climatefriendly investments,” he said after launching the inaugural ACMF here yesterday.
Ranjit said it was important for countries to focus on sustainable financing and recognising the importance of sustainable and responsible investments.
“In Malaysia, SC has put forward a framework for sustainable and responsible investments (SRI). We have done this through facilitating the growth of sukuk segments, such as the SRI sukuk framework, for the development of the SRI framework.”
He said Malaysia tied in Islamic Finance with the Asian SRI funds market.
“It is important to build on that momentum. We think sustainable finances are important to create an ecosystem,” he said.
Ranjit said Asean launched the AGBS to develop a green bond asset class, helping to finance large infrastructure financing and ensuring this extends to more sustainable initiatives.
On the recent 2018 Budget, he said it was inclusive and addressed the people’s needs.
“It’s pragmatic as it focuses on developing long-term potential for the country’s competitiveness in terms of education, skills development and digital market technology,” he said, adding that these aspects were important because it would help investors gauge Malaysia’s attractiveness as an investment destination.
“It is also a responsible budget as fiscal discipline is being maintained,” said Ranjit.
“On the bond market, Malaysia is a very large player, and we continue to find ways to enable better access to the bond market segment.
“The AGBS is designed to be a benchmark — dependent on the types of issuances that come in. The overall amount of infrastructure financing that the country or the region has got to go through is significant,” he said.
International Capital Market Association (ICMA) chief executive Martin Scheck said it welcomed the alignment of AGBS with the Green Bond Principle (GBP), which recommends transparency and disclosure to promote integrity in the green bond market.
AGBS was developed based on ICMA’s GBP, and is tailored to meet the needs and commitments of Asean countries.
The AGBS label is used only for issuers and projects in the region, but it specifically excludes any fossil fuel-related projects.
The Warisan Merdeka development is comprised of three phases, and will include the iconic Merdeka PNB118 Tower and a retail mall. It is expected to cost RM7 billion.
Out of the RM7 billion, the first phase’s gross development value stands at RM5 billion.