DBS Group Holdings and United Overseas Bank (UOB) have jointly established a US$110 million ($142 million) sustainability-linked subscription loan facility with ABC Impact, an impact investing firm backed by Temasek and a member of Temasek Trust Asset Management.
According to an Oct 13 announcement, this transforms ABC Impact’s existing conventional loan facility into an instrument that links financing to “measurable impact targets”.
A conventional subscription loan facility is typically a short-term facility that allows private equity and impact funds to bridge the gap between investments made and the receipt of capital called from investors.
With the sustainability-linked loan facility — which is linked to sustainability performance targets — ABC Impact and the two banks will channel capital flows towards projects with meaningful outcomes while embedding a focus on measurable impact and disclosure into the financing structure itself.
The loan facility is for ABC Impact Fund II, which was incepted in August 2023 and held its final close in March this year.
ABC Impact Fund II assets under management (AUM) currently exceed US$600 million, double the size of its inaugural Fund I, with commitments from investors including Temasek, Temasek Trust, the Asian Development Bank, Mapletree Investments, SeaTown Holdings, an undisclosed Southeast Asian sovereign wealth fund and ultra-high-net-worth individuals.
See also: ‘Strong storytelling, clear visual aids’ help ABC Impact explain impact of investments
Under the terms of the sustainability-linked loan facility, ABC Impact Fund II’s portfolio companies will be required to achieve sustainability performance targets related to avoided or reduced greenhouse gas emissions, as well as number of beneficiaries reached across key impact sectors such as agriculture, healthcare, education and financial services.
Sugandhi Matta, chief impact officer, ABC Impact, says: “With our investors’ capital already fully dedicated to impact, and now our financing linked to measurable sustainability outcomes, every dollar we manage is aligned with our mission. By embedding performance targets into mainstream financing structures, we are reinforcing our commitment to deliver both financial discipline and positive social and environmental outcomes across Asia.”
ABC Impact, formerly ABC World Impact, has tracked key impact indicators across its portfolio since inception; its first impact report was launched in March 2021 for 2020 — its first year of impact investing.
In September, Temasek Trust, Temasek Foundation and Temasek Trust Asset Management released their inaugural impact report covering the entire Temasek Trust ecosystem, including the work of ABC Impact.
