In April, integrated healthcare provider, IHH Healthcare, announced it had secured its first sustainability-linked loan. The S$300m facility with UOB also represented the bank’s first sustainability-linked loan for the healthcare sector.
The Malaysia-based company operates more than 140 healthcare facilities across 10 countries – including in excess of 80 hospitals, clinics and ambulatory care centres – and employs over 70,000 people.
IHH Healthcare was recently included in the FTSE4Good index series, designed to measure the performance of companies demonstrating specific ESG practices. FTSE4Good indices can be used as tools in the creation of index tracking investments, financial instruments or fund products focused on sustainable investment.
IHH Healthcare’s first sustainability-linked loan marks a key milestone in the company’s ongoing commitment to embed sustainability across its multinational network says Dilip Kadambi, Group CFO.
“It provides flexible working capital that aligns our business growth financing with measurable sustainability targets,” he says. “We see sustainability as an opportunity to create lasting impact and are committed to capping carbon growth by 2025 and achieving net-zero by 2050.”
Across Malaysia, Singapore, Turkey and Hong Kong, IHH Healthcare has already achieved a more than 90% reduction in single use virgin plastics in non-clinical areas. It has also installed rooftop solar panels in its hospitals in Malaysia and Hong Kong.
“Looking ahead, we are operationalising a large-scale solar project in Turkey, which is expected to supply up to 80% of the energy needs of our hospitals there,” says Kadambi. “Sustainable finance will be vital in scaling our impact and we look forward to leveraging more sustainable finance solutions.”
The healthcare sector is increasingly recognising its role in climate change, with initiatives aiming to reduce its substantial carbon footprint. For example, the World Economic Forum has reported that climate change could lead to an additional US$1.1trn in extra healthcare costs by 2050, emphasising the urgent need for sustainable practices within the sector.
UOB’s sustainability-linked financing framework offers clients a structured, transparent and effective approach to integrating sustainability into their business strategies.
“Structured under our sustainability-linked financing framework, the loan incorporates pre-approved and externally validated key performance indicators and sustainability performance targets,” explains Ang Moh Chuan, Managing Director, Group Corporate Banking at UOB. “This ensures measurable and trackable sustainability outcomes, reinforcing IHH Healthcare’s commitment to integrating sustainable practices across its operations.”
The bank had provided S$16.6bn in sustainability-linked loans for clients across sectors including real estate, construction and infrastructure and industrials as of 31st December 2024.
“Sustainability-linked loans are designed to encourage companies to enhance their sustainability performance by tying loan terms to specific targets,” adds UOB’s managing director, group corporate banking. “In 2024 alone, we provided S$58bn in sustainable financing, playing a leading role in advancing ASEAN’s green economy.”
