Highlights

• ABC Impact, with DBS and UOB, has converted its loan into a US$110 million sustainability-linked facility tied to measurable impact targets.
• ABC Impact Fund II, managing over US$600 million, will link financing to emissions reduction and beneficiary reach in key sectors.
• The initiative embeds social and environmental outcomes into financing structures, as well as involves top investors, including the Asian Development Bank.

DBS Group Holdings and United Overseas Bank (UOB) have associated with ABC Impact, an impact investment firm backed by Temasek, to launch a US$110 million sustainability-linked subscription loan facility.

This step converts ABC Impact’s earlier conventional loan structure into one that connects financing to measurable impact targets.

A conventional subscription loan facility is generally a short-term arrangement that helps private equity and impact funds bridge the gap between making investments and receiving committed capital from investors.

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By linking the new loan to sustainability performance targets, ABC Impact and the two banks aim to direct capital flows towards projects with social and environmental outcomes and also to embed measurable impact and disclosure elements within the financing structure itself.

The facility applies to ABC Impact Fund II, which began operations in August 2023 and closed fundraising in March this year.

The fund manages over US$600 million, double the size of its first fund. Investors include Temasek, Temasek Trust, the Asian Development Bank, Mapletree Investments, SeaTown Holdings, a sovereign wealth fund from Southeast Asia, and a multitude of ultra-high-net-worth individuals.

Under the loan’s terms, companies within ABC Impact Fund II’s portfolio must meet targets related to greenhouse gas emissions reduction and the number of beneficiaries reached in sectors such as agriculture, healthcare, education, and financial services. These performance indicators form the basis of the sustainability-linked structure.

Sugandhi Matta, Chief Impact Officer at ABC Impact, said that with investor capital fully aligned with impact objectives and financing now tied to measurable outcomes, every dollar managed by the firm works toward both financial discipline and positive social and environmental results in Asia.

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ABC Impact, previously known as ABC World Impact, has monitored impact indicators since its inception. It released its first impact report in March 2021, which detailed its activities during 2020.

In September, Temasek Trust, Temasek Foundation, and Temasek Trust Asset Management published their first impact report, which included the work of ABC Impact within the Temasek Trust ecosystem.

Ends/

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Source: The Edge Singapore