Hong Leong Bank Fully Subscribes to RM350M ASEAN Green Bond

Hong Leong Bank ·  May 29 12:00

Hong Leong Bank Fully Subscribes to RM350 Million ASEAN Green Bond Launched by

Exio Logistics and Hong Leong Investment Bank

The green bond is the first in Malaysia designed to finance green warehousing,

ahead of the development of a sustainable logistics hub in City of Elmina, Shah Alam

Kuala Lumpur, 20 May 2024 – In a significant move towards sustainable development and increasing its green financing portfolio, Hong Leong Bank Berhad ("HLB") has recently announced its full subscription to a RM350 million ASEAN Green Bond. The green bond, issued by Exio Logistics Sdn Bhd ("Exio Logistics") and advised by Hong Leong Investment Bank ("HLIB"), aims to fund the development of Exio Logistics' new transformative, green building-certified logistics hub in City of Elmina, Shah Alam, making it the first green bond in Malaysia designed for the financing of green warehousing.

Exio Logistics, a joint venture between IJM RE Sdn Bhd, a wholly-owned subsidiary of IJM Corporation Berhad ("IJM"), and FMM Elmina Sdn Bhd, whose shareholders are Tan Sri Dato' Teo Chiang Hong, Mettiz Capital Sdn Bhd and Minlon Sdn Bhd, is developing a state-of-the-art logistics hub designed to set new benchmarks in sustainability and efficiency. The facility incorporates Automatic Storage Retrieval Systems (ASRS) technology, providing tenants and operators with the dual benefits of achieving operational efficiency and excellence while working towards their sustainability goals. Upon completion, Storio Sdn Bhd will be the operator of the entire logistics hub.

Kevin Lam, Group Managing Director and Chief Executive Officer of HLB, shared the importance of green investments to the overall growth of the industry, and highlighted HLB's commitment to further supporting the industry through green financing and ESG advisory.

"ESG financing is a key growth area, not just for our organization, but for the wider economy in general. As shown through this green bond issuance and other green financing initiatives, we are committed to being a partner for businesses to strike a balance between being environmentally-conscious while still being economically competitive. In fact, we have approved over RM3.2 billion on renewable energy financing and RM3.97 billion in green building / township financing in FY2023, proving our commitment to capitalizing on climate-related opportunities and supporting the growth of green projects in Malaysia and beyond."

In this green bond issuance, HLIB acts as the principal adviser, lead arranger, lead manager, lodgement party, and facility agent, highlighting its continuous commitment towards green financing and investments in the larger economic landscape, specifically in logistics and real estate. Its Group Managing Director and CEO, Lee Jim Leng, commented:

"Malaysia accounts for 27% of the total issuance of ASEAN Green, Social and Sustainability bonds and sukuk, a strong testament to the market's growing interest in sustainability projects. This has led to an uptick in the popularity of green investments in Malaysia, as more developers and organizations incorporate ESG considerations into their offerings. As we move ahead with our shared sustainability agenda, we have a responsibility as a financial institution to promote green, low-carbon projects. We see our commitment to this green bond issuance leading to further green developments, not just on the product front but also implemented throughout the production, logistics, and distribution process, as we collectively build towards carbon neutrality."

Lee Chun Fai, Exio Logistic's representative, who is also the Group CEO & Managing Director of IJM also expressed enthusiasm on the increasing appeal of green financing and the flexibility it approves developers in pursuing sustainable projects.

"Leveraging green bonds to finance our development is a win-win approach, providing us with the flexibility to fundraise for our projects, while ensuring that sustainability considerations are integrated. This marks a significant milestone for Exio Logistics as we lead the way in developing environmentally conscious infrastructure. Our commitment to green financing underscores our goal of advancing industry standards and moving towards achieving global carbon neutrality. We are enthusiastic about this collaboration with Hong Leong and look forward to pursuing more green-focused projects in the future."

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