The Monetary Authority of Singapore (MAS) unveils an innovative Minimum Viable Product (MVP) developed by the Project NovA! consortium, aimed at assisting banks in issuing Sustainability-Linked Loans (SLLs) in the real estate sector, addressing key challenges and promoting transparent green financing.
The Monetary Authority of Singapore (MAS) has introduced a groundbreaking Minimum Viable Product (MVP) designed to aid banks in issuing Sustainability-Linked Loans (SLLs) within the real estate sector. The MVP, developed by the Project NovA! consortium, has successfully concluded its initial phase of work, accompanied by the release of a comprehensive whitepaper detailing the methodology behind the MVP system.
The announcement was made at the Singapore FinTech Festival by Mr. Tan Kiat How, Senior Minister of State for the Ministry of National Development and Ministry of Communication and Information. During the event, he also revealed a strategic collaboration between MAS and the Building and Construction Authority (BCA) to integrate data and services from BCA’s Super Low Energy Building (SLEB) database.
The first phase of Project NovA! addressed crucial challenges faced by banks in extending SLLs, including inaccurate settings for Sustainability Performance Targets (SPTs), greenwashing concerns, and inefficient processes leading to manual errors in interpreting disclosures from lenders.
The AI-powered MVP developed in the initial phase offers three core features to help banks overcome these challenges:
- Facilitating the setting of performance targets for SLLs through peer and industry benchmarking, utilizing data from government sources for accurate sustainability assessments.
- Monitoring against selected KPIs/SPTs to curb greenwashing by comparing borrowers’ current sustainability performance with agreed SPTs.
- Enhancing processing of sustainable finance transactions through the Autonomous Documentation Insights Engine (ADIE), which uses Natural Language Processing to extract sustainability insights swiftly and accurately.
In the upcoming phase, MAS will collaborate with BCA to leverage BCA’s SLEB database for country-wide data on green buildings, enabling NovA! to identify prospective green building projects and accelerate green financing within the real estate sector. The AI capabilities of NovA! will also be extended to support sustainable financing in other sectors, such as power and manufacturing industries.
Mr. Sopnendu Mohanty, Chief FinTech Officer at MAS, emphasized, “NovA! creates a transparent and effective environment that combats greenwashing and directs finances towards truly sustainable projects.” Mr. Ang Kian Seng, Group Director of Environmental Sustainability at BCA, added, “This partnership is a critical step towards meeting Singapore’s net-zero and Singapore Green Building Masterplan targets.”
Source – Monetary Authority Of Singapore
