BMO Financial Group, acting as lead co-sustainability structuring agent as part of a syndicate of eight Canadian and U.S. banks, financed a deal with Boralex, a Quebec-based international renewable energy producer. An amendment to an existing credit facility, the deal introduces a margin adjustment incentive mechanism tied to Boralex’s commitment to increase avoidance of carbon emissions and increase women’s representation in management positions. In this financing, a part of Boralex’s borrowing costs will depend on whether it achieves pre-determined sustainability targets.
The sustainability-linked, five-year, $525 million revolving credit facility includes terms that reduce or increase the borrowing costs as targets on CO2 emissions avoidance levels and equal opportunities for women — including representation in management positions — are met or missed.
“Boralex is a leader in the renewable energy sector promoting a fully integrated vision placing as much importance on achieving our CSR strategy as the financial targets in our strategic plan,” Bruno Guilmette, vice president and CFO at Boralex, said. “By producing renewable energy, we’re already positively contributing to greenhouse gas reduction. In 2020, our portfolio helped to avoid 296,260 tons of CO2 equivalent emissions. Our ambition is also to go ‘beyond renewable energy’ by setting different CSR objectives, including strengthening the representation of women in management and across our workforce. This sustainability-linked loan (SLL) aligns well with our intention to increase Boralex’s participation in the expanding market.”
“Helping clients like Boralex reach their ESG goals is another way BMO is boldly growing the good in business and life. Deals like this are a great example of the way BMO works with clients across industries both to serve their needs and work toward a more sustainable future,” Jonathan Hackett, head of sustainable finance at BMO Capital Markets, said. “Sustainable lending continues to grow rapidly worldwide and in Canada, and BMO is proud to be the leading Canadian bank for SLL structuring. Our experience in the energy sector, combined with our proven expertise in sustainable finance, positioned us as the ideal lead partner in helping Boralex reach its environmental and social goals.”