DBS China has completed its first transition finance transaction, extending a 1.776-billion-yuan ($258 million) long-term factoring facility to CES International Financial Leasing Co Ltd, a subsidiary of China Eastern Airlines Holding Co Ltd, to support the aviation sector's low-carbon transition.

The deal marks DBS China's first transition finance transaction aligned with the "Shanghai transition finance catalogue".

According to DBS China, proceeds from the facility will be used to acquire a new-generation cargo aircraft for lease to China Cargo Airlines to support its air freight operations.

The aircraft is expected to deliver improved fuel efficiency and lower carbon emissions, helping the carrier optimize its fleet mix and advance its low-carbon transition, the bank said.

Sherman Hung, deputy CEO and head of Institutional Banking Group at DBS China, said the financing solution will support China Eastern Airlines and its subsidiaries in promoting a lower-carbon and more sustainable aviation transport model.

Florence Tan, managing director and head of Global Transaction Services at DBS China, said the transaction also provides a reference for future supply chain finance solutions aligned with transition finance standards.