There will be a lot to talk about when the International Green Building Conference starts in Singapore this week, including two recent announcements: A $200 million fund has been set up by Sustainable Development Capital Asia (SDCL) to fund energy efficiency projects in Singapore, including industry infrastructure, building retrofits and renewable energy installations, while CapitaLand Limited is the only company in Asia has been named both the Regional Sector Leader for Asia and the Global Sector Leader in the ‘Diversified’ property category by the Global Real Estate Sustainability Benchmark (GRESB). Read More

For the full programme of the International Green Building Conference as well as exhibitors at the BEX event, go to: www.sgbw.com.sg and www.bex-asia.com

CapitaLand is the only company in Asia to be named Global Sector Leader by the Global Real Estate Sustainability Benchmark

By Eugene Tay in Green Business Times (5 September 2013):

Singapore, 5 September 2013 – CapitaLand Limited (CapitaLand) has been named both the Regional Sector Leader for Asia and the Global Sector Leader in the ‘Diversified’ property category by the Global Real Estate Sustainability Benchmark (GRESB). Among 74 real estate companies and funds surveyed in Asia, CapitaLand is the only organisation to be named a Global Sector Leader. This is also the third consecutive year that CapitaLand has been named a Regional Sector Leader for Asia since GRESB was incepted in 2011. Sector leaders are recognised for their outstanding performance among regional peers and their best practices in sustainability performance illustrate the way forward for the real estate industry.

GRESB today announced the release of its 2013 Report, which is based on sustainability data gathered from 543 real estate companies and funds, providing aggregate information on 49,000 properties in 46 countries across the globe. Together, the 543 real estate companies and funds surveyed represent US$1.6 trillion in gross asset value.

Companies were nominated by institutional investors to take part in the GRESB Survey. The survey is based on a broad view of sustainability indicators, comprising seven aspects: management; policy and disclosure; risks and opportunities; monitoring and environment management system; performance indicators; building certification and benchmarking; and stakeholder engagement. Collectively, these aspects provide important contributions to strong sustainability performance, beyond efficient use of energy and water and the reduction of greenhouse gas emissions and waste.

More than 50 institutional investors, representing on aggregate US$6.1 trillion of institutional capital, now use the GRESB benchmark results in the various stages of the investment management and engagement process, with a clear goal to optimise the risk/return profile of their real estate investments.

Mr Lim Ming Yan, President & Group CEO, CapitaLand Limited, said: “We are pleased to be recognised by GRESB as the Regional Sector Leader for Asia and the Global Sector Leader in the ‘Diversified’ property category. This achievement attests to our commitment to sustainability across our multi-sector real estate portfolio spanning over 110 cities in more than 20 countries worldwide.”

Mr Lim added: “Sustainability is integral to our business. We will continue our Group-wide efforts to develop and operate our properties in a ‘green’ manner, engage our stakeholders in our sustainability drive and contribute to the well-being of our employees and the community in a responsible and ethical way.”

Source: www.greenbusinesstimes.com

NEA’s Energy efficiency Singapore news bulletin (5 September 2013):

New way for companies to finance energy efficiency in Singapore

Singapore businesses in the manufacturing sector have another very good reason to embark on an energy efficiency drive.

With no upfront investment, companies can cover up to 100% of the capital cost of energy efficient technologies, systems and equipment. It is paid for out of the energy cost savings achieved through performance guaranteed agreements with suppliers.

All this is possible now through an approved $200 million fund set up by Sustainable Development Capital (Asia) Limited (SDCL), with the encouragement and support of the Economic Development Board (EDB).

SDCL Asia is focussed on the development and project financing of energy efficiency projects, primarily in Singapore’s manufacturing sector, where there is a recognised opportunity to achieve some significant energy savings.

Up until now there has appeared to be some reluctance by companies to embark on energy efficiency measures, either because of the perceived capital cost involved or because they were not convinced they would achieve genuine energy savings.

SDCL considers it has come up with the ideal solution as it is prepared to provide up to 100% of the capital costs to finance the installation of technologies, systems and equipment – without any upfront outlay by the host company – with a guaranteed return through energy cost savings.

How does it work?

Firstly, the host Singapore company enters into an energy service agreement (ESA) with the Special Purpose Vehicle (SPV) – provided by SCDL – to fund and implement the energy efficiency project in return for a share of the resulting energy savings.

Next, the SPV sub-contracts the implementation to the ESCO through an energy performance contract (EPC) and the investor provides debt and equity capital to fund the project capex (capital expenditure) and other costs.2

The EPC may incorporate a performance guarantee, on-going Operation and Maintenance (O&M) and Measurement and Verification (M&V) services. Alternatively some or all of these may be provided directly to the host.

Finally, the other terms of the EPC are designed to be back-to-back with the ESA, leaving the SPV with only the obligation to fund the project and the ESCO with the obligation to deliver the project.

Glen Plumbridge, the Managing Director of SDCL explains that under the project agreement – or Energy Services Agreement – the investment return is ‘paid from savings’.

“The investment return is typically based on a share of energy savings achieved for an agreed contractual term (typically 5 to 10 years). So at the end of the contract term, the installed systems and equipment and all the energy savings they generate are retained by the host company.

“We can even structure the contract so that payments are made only if and when measured and verified energy savings are achieved” says Mr Plumbridge, who welcomes the opportunity to offer its services and funds to Singapore companies.

The energy efficiency project size would typically range from S$1million to 40 million. It can cover a host of capital expenditure items, including industry infrastructure – for the supply, conversion, transmission, distribution or consumption of energy – building retrofits and renewable energy installations.

For Singapore companies, this can make perfectly good business sense. Improving energy efficiency is one of the most cost effective ways of reducing energy costs and greenhouse gas emissions.

It is a process and a plan that has worked very well in other parts of the world and SDCL has direct experience in handling energy efficiency finance in the United Kingdom where performance guarantees and 100% upfront capital investment has become more common.

Headquartered in London, SDCL is a specialist investment and financial advisory firm, focused on energy efficiency. In 2012 SDCL launched the innovative UK Energy Efficiency Investments Fund, in which the UK government’s UK Green Investment Bank made a GBP50 million cornerstone investment commitment.

SDCL is a member of the United Nations Environment Programme Finance Initiative and is authorized and regulated in the UK by the Financial Services Authority.

Energy efficiency projects SDCL has funded includes lighting upgrades, compressed air and extraction fans, metering, motor replacement, energy optimisation, installation of equipment and related services.

They can operate over multiple sites where there is a need for different approaches and equipment. Obviously in Singapore it could involve upgrading of chiller plant for air conditioning or industrial equipment required for processing, storage and packaging.

SDCL fund invests in non-domestic energy efficiency projects in the UK. SDCL Asia will be drawing on the specialist experience  and expertise developed within the SDCL Group both in the UK and Asia to implement energy efficiency in Singapore, which will  be a first of a kind for the region.

SDCL Asia, a joint venture between Sustainable Development  Capital LLP (“SDCL”) and First Eastern Investment Group (“First  Eastern”) of Hong Kong, which has committed to be the  cornerstone investor to launch the energy efficiency financing  process.

Source: www.e2singapore.gov.sg and www.sdcl-asia.com