Asia Symbol (Shandong) Pulp and Paper Co Ltd has secured a one billion yuan (US$142 million) sustainability-linked loan from a consortium of Chinese banks. Led by Agricultural Bank of China, the consortium includes Export-Import Bank of China, Bank of Communications and China Merchants Bank.

According to Agricultural Bank, the loan marks the first foreign-funded enterprise securing an SLL from a consortium of Chinese banks and the first SLL in the domestic pulp and paper industry. Asia Symbol is a member of Royal Golden Eagle (RGE), an international group of resource-based manufacturing companies.

Interest rates for the SLL will be tied to five key performance indicators (KPIs) – reduction of atmospheric pollutant emissions and water consumption, improvement in water recycling rate and alkaline recovery rate, and creation of new job opportunities.

The firm will benefit from lower interest rates if it meets the specific and measurable KPIs in the agreement within the next three years. A reputable third-party environmental certification agency will issue a certification report and verify the annual assessment results.

At the signing ceremony, Jun Yang, vice-president, investment banking department of the Agricultural Bank of China, says the KPIs were designed based on three sustainable development directions – clean production, circular economy, and social responsibility.

“We hope that the SLL can encourage more partnerships between banks and corporates and provide a viable model for the sustainable transformation of traditional industries,” adds RGE China vice-president Langen Shu.

Among the first non-property corporates in Singapore to tap SLLs, RGE has been making progress in moving the bulk of its financing to green and sustainable ones. Last year the firm raised a total of US$1.6 billion in SLLs for its various business groups.