Thursday 14 February 2019

£1.4bn positive incentive loan marks the first UK corporate to link its interest rate to a sustainable infrastructure score – underlining the power of green finance.


Thames Water, which broke new ground in December with its £1.4 billion revolving credit facility (RCF), became the UK's first ever corporate to link its interest payments to its GRESB (Global Real Estate Sustainability Benchmark) infrastructure score. Running until 2023 with the option of a two-year extension, the RCF is structured so that outperformance against the infrastructure score will mean a lowered margin, with the financial gains paid into the British utility company's charitable fund.

GRESB data acts as the ESG benchmark for real assets, and in 2018 were composed of 904 real-estate funds, 75 infrastructure funds, 280 infrastructure assets and 25 debt portfolios. The data are used by both institutional and retail investors.

As interest in ESG-driven (environmental, social and governance) investment grows, the Thames Water transaction serves as a blueprint for integrating sustainability performance and financing requirements. The EMEA market for positive incentive loans has expanded significantly since 2017, which BNP Paribas believes may have topped €40 billion in 2018.

The BNP Paribas teams behind the transaction – comprising Global Banking, Sustainable Finance and Loans – were named Team of the Month in The Banker magazine's February 2019 edition. Two of the largest positive incentive loans to date were also arranged by BNP Paribas: Danone's €2 billion transaction linked to its ESG score and Solvay's €2bn deal linked to a greenhouse gas emissions reduction target.


Rate this article :
0
0
0
 
 

Give us your feedback

Please validate CAPTCHA.

RELATED ARTICLES
bnp-paribas-granted-green-climate-fund-accreditation

Accreditation marks an important milestone for BNP Paribas following its strategic shift in recent years to focus on the energy transition – and will allow the bank to work in partnership with the Fund to support its sustainable development programmes

bnp-paribas-the-bloomberg-sustainable-business-summit
BNP Paribas was a first-time sponsor of the 4th annual Summit with two speakers at the event.
BNP Paribas was a first-time sponsor of the 4th annual Summit with two speakers at the event.
a-new-element-in-the-mix
BNP Paribas collaborates with chemical company Solvay on €2bn revolving credit facility linked to environmental...
BNP Paribas collaborates with chemical company Solvay on €2bn revolving credit facility linked to environmental commitments.
key-takeaways-from-the-2018-bnp-paribas-ipo-conference
BNP Paribas hosted its third annual IPO conference, welcoming around 40 companies.
BNP Paribas hosted its third annual IPO conference, welcoming around 40 companies.
the-middle-east-is-joining-the-green-finance-revolution-
Get ready, because the Abu Dhabi Declaration of 25 signatories, including BNP Paribas,...
Get ready, because the Abu Dhabi Declaration of 25 signatories, including BNP Paribas, may change how we think about the...
{POPUP_CONTENT}