THE BLOG

27
Sep

Have you ever considered a ‘Green Loan’?

Asian property developers are exploring the use of green loans. Recently, there has been a deal in Singapore where a green loan was used to fund an office tower.

Singapore-based Frasers Property Ltd. raised a S$1.2 billion ($881 million) green loan, the first of its kind by a Southeast Asian borrower under principles set by Asia Pacific Loan Market Association in March that aim to standardize disclosure. The facility refinances existing loans tied to Frasers Tower, an energy efficient office with its own park and podium roof gardens.

Green loan are playing catchup to bond markets, as borrowers are demanding more channels and options for such financing amongst a sustainability backdrop to address the pollution crises created by rapid urbanization and consumerism. The critics of green finance have pointed to a lack of universal standards and measures like for example, the APLMA’s guidelines aim to increase transparency on the use of proceeds and on the environmental impact of projects.

“There are strong returns for banks to get into sectors like green buildings and renewable energy as they are showing very strong financial performance,” said Jonathan Drew, Managing Director, Infrastructure and Real Estate Group, Global Banking Asia-Pacific at HSBC Holdings Plc.

Singapore’s Ho Bee Land Ltd. in August signed a 200 million pound ($264 million) green bridge loan for the acquisition of Ropemaker Place commercial building in London. Hong Kong real estate firm New World Development in March raised a HK$3.6 billion ($461 million) maiden green loan for a commercial re-development project.

“In Hong Kong, we increasingly see property firms that are developing green buildings based on the expectations of tenants, financiers and the community to develop projects that provide higher level of energy efficiency,” said Drew, one of the lenders for New World transaction and the green structuring adviser for Ho Bee Land deal.

Image supplied by Police Bank Australia: Green Loan

Image supplied by Police Bank Australia: Green Loan

Asian borrowers outside of real estate have also been adopting green loans. Hong Kong’s Leo Paper Group this month signed a HK$350 million loan for environmental projects in China. Singapore’s Wilmar International Ltd. this year has raised two separate credit facilities where the interest rate will be reduced based on sustainability targets achieved. Sydney-based Macquarie Group Ltd. in June raised 2 billion pound loan, with tranches to financing renewable energy-efficient projects and buildings.

Have you thought of applying for a green loan for a personal project of yours? If so, how have you gone about doing it? Have you been successful? If so, please share your story with us.

To view the original Bloomberg article, click here.

24
Sep

Can Thailand follow in Indonesia’s footsteps?

Indonesia’s President has signed a moratorium, (a temporary prohibition of an activity) on all new oil palm plantation development, an official said on Thursday (Sept 20), in a move initiated by environmentalists.

The moratorium pauses any new land being made available for plantations in the world’s top producer of the edible vegetable oil, a key ingredient in many everyday goods, from biscuits, cakes, shampoo and cosmetics.

President Joko Widodo signed the instruction, which will last a minimum of three years, on Wednesday.

“The moratorium is to improve the governance of sustainable oil palm plantations, provide legal certainty, increase the productivity of smallholder oil palm plantations, maintain environmental sustainability and contribute to the reduction in greenhouse gases,” he told AFP in a WhatsApp message.

Plantations on the Indonesian Sumatra island, Papua and the Indonesian part of Borneo have expanded in recent years as demand for palm oil has skyrocketed, bringing huge profits to companies and tax revenues to the government.

The palm oil growth has been blamed for the destruction of tropical forests that are home to many endangered species, and forest fires that occur every year during the dry season due to illegal slash-and-burn clearance.

An aerial view of a palm oil plantation in Indonesia's South Sumatra province. October 2016 Photo supplied by: REUTERS

An aerial view of a palm oil plantation in Indonesia’s South Sumatra province. October 2016
Photo supplied by: REUTERS

The moratorium was first proposed in 2015, following devastating fires that covered large stretches of South-east Asia in toxic smog for weeks.

A moratorium on conversions of new peat lands was established in 2011 to improve management and reduce fires, but campaigners say this is sometimes ignored when local governments grant concessions.

In 2015, the government banned new development on all peat lands after swathes of carbon-rich peat were drained for use as plantations in recent years, creating highly flammable areas.

The decision comes as Indonesia and Malaysia battle a move by the European Parliament to ban the use of palm oil in biofuels.

The EU Parliament voted earlier this year in favour of a draft law on renewable energy which calls for the banning of palm oil in biofuels from 2030, due to the accumulating concerns about its impact on the environment.

Indonesia and Malaysia will be hard hit economically as they are the world’s top exporters of palm oil.

Can Thailand follow in Indonesia’s footsteps, and stop the burning of their crops?

View the original article here

21
Sep

Energy Blockchain interest grows across Asia

Growing market interest and a bunch of ground-breaking projects have shown how Asia could be in line to match Europe and North America in the field of blockchain-based energy trading innovation. As well as hosting a vibrant start-up community of its own, the region is already a major focus for international energy blockchain leaders such as US-based LO3 Energy and Power Ledger of Australia.

There is an immense appetite for blockchain-based energy trading in Asia,” said Power Ledger analyst Marrah Fry. “We have received a great deal of support for our two announced projects in this region.

Perth-based Power Ledger’s Asian projects include a tie-up with the Thai renewable energy developer BCPG and an alliance with Kepco, Japan’s second-largest utility.

The Thai project has been named the first of its kind in the region, since local utility Metropolitan Electricity Authority is giving the blockchain company access to its network so that Power Ledger can help BCPG offer peer-to-peer energy trading.

Belinda Kincaid, Australia director at LO3 Energy, said her company was also setting its sights on Asia, with two projects soon to be announced in Japan. Asian countries such as Japan, Singapore and South Korea were eager to embrace blockchain-based energy trading, she said, but working in Asia also meant dealing with energy markets that were less mature and receptive.

It impacts the readiness of people to look at how this could be of benefit,” she said. “Each market is different. But a lot of Asian utilities are intrigued and want to do some sort of trial. They are generally quite receptive to learning more.”

Nevertheless, the challenges facing the introduction of blockchain energy trading in the region were highlighted in September, when the Electricity Generating Authority of Thailand announced plans to add fees onto blockchain-linked trades. The first regulatory challenges to blockchain energy trading in the world, came just as Thailand was being named as a leading cryptocurrency market.

In August, the site TechCrunch had named the Thai nation as “one the most interesting cryptocurrency and blockchain countries in Southeast Asia in 2018.”

Power Ledger’s Fry ignored concerns about the impact of the levy, though. “We are aware that the Thai Government recently announced a 15% capital gains tax on cryptocurrency transactions,” she said. “This particular regulation won’t have any impact on our deployment of the Power Ledger platform in Thailand, as users do not actually interact with any cryptocurrency.

Furthermore, she said, the risk of regulatory challenges was not restricted to Asia. “More definitive regulation in the blockchain and cryptocurrency space is something that has become a reality for almost every jurisdiction around the world,” she noted.

Energy Blockchain Trade in Asia is growing. Image supplied by Solarplaza

Energy Blockchain Trade in Asia is growing.
Image supplied by Solarplaza

For Willie Khoo, product and strategy manager at Singapore-based energy blockchain firm Electrify, the answer is to push for greater awareness of the benefits of distributed ledgers, peer-to-peer trading and cryptocurrencies. “People are generally receptive once they can wrap their heads around blockchain and energy, which is a difficult thing to do,” he said. “Explaining blockchain is a herculean task and the energy market is equally hard to fathom.

This means there is often a steep learning curve that investors, regulators and other stakeholders have to go through before they are comfortable with the concept. Once that challenge has been overcome, though, there could be significant opportunities for blockchain energy trading in many Asian countries.

The grids are becoming more and more decentralized,” Khoo said. “The markets are opening up to not just commercial and industrial entities, but also to residential households. I think this is where the opportunity is: to have these grids leapfrog to a completely decentralized system. In Europe or Australia, it’s harder to penetrate these grids. In Asia, the opportunity is there.

Click here to view the original article, submitted by Solarplaza.

14
Sep

The use of Solar and the Blockchain in Southeast Asia Startup BitLumens

Using blockchain and solar energy, UN- and World Bank-endorsed startup company, BitLumens has been tooling its solar home technology to bring electricity and financial inclusion to underserved populations. Myanmar and Indonesia are BitLumens’s first Southeast Asia stops.

Founding CEO Veronica Garcia spoke with Southeast Asia Globe about their plans to lease solar systems to power off-the-grid households, and we (Eyekandi-Solar) decided to share the interview with you.

Tell us a bit about BitLumens…
We’re bringing solar home systems and mini-grid into off-grid communities – so these are communities that are not connected to the power lines. We have some sensors added into these [leased solar power] machines that collect information from each use… such as power generation, power consumption and also carbon mitigation… Before we install these devices, our agents collect KYC, or know-your-customer data, on each of the users, so we would collect things like how many people are within that household, what are their wages, what type of floor do they have… All of this information goes into the blockchain – this KYC combined with the transaction data. These people pay for the devices every month, and… [we] give a [score based on their payment history] so that at the end of the payment period, they will have a credit score, which works as a financial identity where they could either open a bank account or they could have access to a micro loan that would be backed by BLS [BitLumens] tokens.

Are the BLS coins environmentally friendly to mine?
Yes, of course. We use Ethereum [blockchain], and Ethereum uses proof of stake that uses way less energy consumption [to mine than] Bitcoin. As you know, Bitcoin takes around 40 terawatt hours to operate. We don’t accept Bitcoins in the first place because we don’t think it’s very environmentally friendly. We try to stay in protocols that need less computational power.

BitLumens combines blockchain technology and solar energy to bring electricity to those not connected to the main grid Image supplied by SEA-Globe

BitLumens combines blockchain technology and solar energy to bring electricity to those not connected to the main grid
Image supplied by SEA-Globe

Why is BitLumens important to countries like Myanmar and Indonesia?
I do anticipate a decentralised energy system in these types of regions where the power lines cannot reach small communities. In these regions, 1 kilometre of power lines costs around half a million dollars. If you need to run, let’s say, 100 kilometres of power lines until you reach a community of 2,000 users, there is no way that the utility company will do that. However, if you collect the data and tell them this is how much we generate, this is how much they consume and this is how much they pay, things are totally different and one would be able to find partnerships where one could place [solar home] mini-grids. 

Do you have future plans for expansion in other parts of Southeast Asia?
Yes, Indonesia is also an important market for us. We are looking at places like Nosatangara, this is at the southernmost part of Indonesia. There are thousands of people who are not connected to a grid, so we are looking at a place where we could actually place a pilot there… We have partnered with a really good organisation there and the UN was really good to set up all of these connections for us, so we are happy to be announcing that pretty soon… and then we will immediately start the deployment.

More information about BitLumens can be found here, and the original article published by SEA-Globe can be found here.