ACMF introduces Asean Green Bond Standards

KUALA LUMPUR: Permodalan Nasional Bhd (PNB) will be adopting the Asean Green Bond Standards (AGBS), which was launched yesterday in conjunction with the Asean Capital Markets Forum (ACMF), to finance the construction of the Warisan Merdeka Tower.

Citing AGBS, Securities Commissions Malaysia chairman Tan Sri Ranjit Ajit Singh said green financing and investment schemes is gaining strong traction and 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 environment and the AGBS would help in the allocation of resources towards a climate friendly investments,” he told reports after launching the inaugural ACMF here, today.

On Warisan Merdeka Tower project, PNB’s wholly owned subsidiary PNB Merdeka Ventures Sdn Bhd will be the first issuer in the region to adopt the AGBS.

The Warisan Merdeka development, comprising three phases will include the iconic Merdeka PNB118 Tower and a retail mall, is expected to cost RM7 billion.

Out of the RM7 billion, the first phase’s gross development value stands at RM5 billion.

Ranjit said it is also important for a country to focus on sustainable financing and recognising the importance of sustainable and responsible investments.

“In Malaysia, the Securities Commissions has put forward a framework for sustainable and responsible investments (SRI).

“We have done this through facilitating the growth of sukuk segments like the SRI sukuk framework for the development of SRI funds framework.

He said Malaysia ties in nicely the Islamic Finance agenda with the SRI funds market in Asia.

“It is important to build on that momentum. We think sustainable finances are important to create an ecosystem,” he said.

He pointed out Asean has launched the AGBS to develop a green bond asset class, helping to finance large infrastructure financing and ensure this extends in sustainable initiative.

On the recent Budget 2018, he said it is inclusive in addressing the needs of the rakyat.

“It’s also pragmatic as it focuses on developing long-term potential for the country’s competitiveness in terms of education, skills development, digital market technology.

“The budget is also a responsible budget as fiscal discipline is being maintained,” he said.

He said these aspects are important because investors would gauge Malaysia’s attractiveness.

“On the bond market, Malaysia is a very large market that continues to find ways to enable more 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.

Meanwhile, International Capital Market Association (ICMA) chief executive Martin Scheck said it welcomes the alignment of AGBS with Green Bond Principle (GBP), that recommends transparency and disclosure to promote integrity in the green bond market.

The AGBS were developed based on ICMA’s GBP tailored to meet the needs and commitment of Asean.

The AGBS label is used only for issuers and projects in the region, but it excludes fossil fuel related project.

Source: NST

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