ESB has signed a new €1.4 billion ($1.55 billion) five-year sustainability linked loan, the first Irish utility to do so.
The loan has been provided by 14 international banks, with BNP Paribas acting as coordinator and sustainability coordinator.
The syndicated sustainability linked loan (SLL) involves the refinancing of its existing revolving credit facility (RCF) and represents the group’s second foray in the sustainable finance markets, following on from its debut green bond launch in June 2019.
The SLL contains specific KPIs directly linked to ESB’s Brighter Future Strategy and its commitment to leading the transition to a reliable, affordable, low-carbon energy future. The KPIs are also fully aligned with the Irish Government’s Climate Action Plan.
Specifically, the KPIs relate to the reduction of carbon emissions from ESB’s generation fleet and increasing the amount of energy produced from renewable technologies. Meeting these specific KPIs will result in a lower interest rate for ESB.
“The use of green finance, including this sustainability linked loan and our recent Green Bond, further demonstrates ESB’s commitment to leading the transition to a low-carbon future while addressing the requirements of today’s financial markets who are directing increasing levels of capital into carbon action investments. By having sustainability at the heart of our operations, we can maintain a viable and successful business with the financial strength to invest in this future for all our customers,” said Pat Fenlon, executive director, Group Finance and Commercial.
Participating banks are: Allied Irish Banks, Banco Bilbao Vizcaya Argentaria, Bank of Ireland, Barclays Bank, BNP Paribas, Danske Bank, HSBC, Intesa Sanpaolo Bank, JPMorgan Chase Bank, MUFG Bank, Royal Bank of Canada, Societe Generale, Sumitomo Mitsui Banking and Ulster Bank Ireland.
ESB operates across the electricity market: from generation, through transmission and distribution to the supply of customers with an expanding presence in the Great Britain generation market.