Keppel DC REIT has launched its inaugural green financing framework to bolster its sustainability efforts and progress towards achieving its environmental, social and governance ( ESG ) targets and commitments.

The framework will guide green financing transactions undertaken by the real estate investment trust, exclusively funding green data centre projects that meet the eligibility criteria in five categories: green buildings, renewable energy, energy efficiency, climate change adaptation, and sustainable water management.

The criteria have been selected based on an assessment of industry best practices and align with Keppel DC REIT’s material and important ESG factors, the investment trust says in a statement.

Eligible types of investments include acquisitions of new or existing data centres, capital and operating expenditure, as well as asset enhancement initiatives.

The framework also outlines the management of funds for green data centre projects and establishes methodologies to monitor and report the environmental outcomes of the green financing transactions.

Loh Hwee Long, chief executive officer of Keppel DC REIT Management, the trust’s, says the framework “reflects our dedication to integrating sustainability into every aspect of our business”.

“This framework not only aligns our capital management strategy with our ESG objectives but also enhances the long-term value we create. We remain committed to building a quality portfolio of future-proof data centre assets to deliver sustainable returns,” he adds.

The framework was developed in alignment with the four core components of the International Capital Market Association’s ( ICMA ) Green Bond Principles. It also adheres to the Loan Market Association, the Asia Pacific Loan Market Association, and the Loan Syndications and Trading Association’s Green Loan Principles. These four components cover the use of proceeds, project evaluation and selection process, the management of proceeds, and the reporting process. DBS Bank was the sole adviser of the framework.

The framework also references internationally recognized sustainable finance taxonomies in relevant jurisdictions, including the EU Taxonomy and the Asean Taxonomy.

DNV Business Assurance Singapore assessed the framework against relevant sustainable finance principles and taxonomies in relevant jurisdictions. It issued a second party opinion, concluding that Keppel DC REIT’s framework is consistent with the requirements of these principles and standards.