Align your green project to the four components of the Green Loan Principles: Typically, lenders recommend – and sometimes require – that borrowers get an external review of their Green Loan Framework from a recognized opinion provider to ensure alignment with the Green Loan Principles. Restructuring, Insolvency & Special Situations, Ashurst acts on EUR860 million syndicated facility to CNCE Group, Ashurst advises Barclays Bank PLC in connection with the £2.97 billion firm cash offer for G4S plc by Garda World Security Corporation, Ashurst launches solution to simplify readiness and compliance with new EU ESG regulation. Among the most important of these transactions are two that were closed with Iberdrola last January, which at the time represented the largest RFCs in the world.

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Yes and no. We would have liked a clearer steer towards a broader view of "sustainability", since we have had client conversations around targets such as: employee diversity, reductions in site accidents, commitments to social projects such as mentoring schemes, and governance initiatives such as employee participation and transparency. Having a deep understanding of our clients' industries and the challenges that they face is key to delivering excellent legal advice. [4] The list of projects that qualify as green is based on the list that the International Capital Market Association uses to define Green Bonds. ​Scroll through these slides to access the personalised features of your Dashboard.
The green loan market aims to facilitate and support environmentally sustainable economic activity. But for those looking at the bigger picture, change is happening fast – and sustainability linked lending is already looking like a winner. Sustainability linked facilities are a win-win for lenders and borrowers and we anticipate substantial growth in this area, particularly among large corporates. If the ESG rating goes up, the interest rate goes down—and vice versa. COPYRIGHT © 2020 SUSTAINALYTICS. We bring together lawyers of the highest calibre; progressive thinkers driven by the desire to help our clients achieve business success. If the rating goes up, the interest rate goes down—and vice versa. Many other companies and major players in their respective industries such the Italian companies Hera, A2A, and Snam, as well as Spain’s AENA, are working hand in hand with BBVA to implement sustainable finance solutions. The ESG/sustainability linked loan however has no green halo on its head. The PDF server is offline. It is mandatory to procure user consent prior to running these cookies on your website. In 2018 the Loan Market Association in the UK issued Green Loan Principles to ensure any … Membership in the LSTA offers numerous benefits and opportunities. Corporate lending clients have been asking us: "How many Green Loans are being written? The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Material personally selected by your relationship manager for your interest. Solutions for Companies and Organizations, ESG Risk Ratings and Sustainability Linked Loans, Please note that this site uses cookies to improve your user experience. Today it is on the world stage as one of the most active organizations in the field, and the indisputable leader in Spain and Italy. Short Reads - Er is de laatste tijd veel te horen en te lezen geweest over de benchmarktransitie (voor een beknopte beschrijving van die transitie verwijs ik graag naar mijn artikel van 7 augustus 2020).

What's in it for the lenders though? ", "How will the GLPs work for revolving facilities?

[5][6] By June 2018, Bloomberg News reported that ING Group had closed 15 similar deals where the bank would lower the cost of borrowing by between 5% and 10% based on the company's ESG rating provided by Sustainalytics.

BBVA has been a pioneer and the dominant player in the sustainable loan business. In fact, it is one of the most renowned institutions for its sustainable product capabilities. The green lending initiative appear to have been taken by the lenders as opposed to borrowers.[3]. Our people are experts of law; progressive thinkers, in tune with economic, political and market conditions, driven to help to provide the clear commercial advice you need to achieve business success. More often, companies are looking to finance environmentally-focused corporate initiatives with green loans. Revolving credit facilities, which have popularly been recognized as sustainable loans, can also be considered green if they qualify with at least one eligible category over the course of the their life.
The Green Loan Principles, issued by the Loan Market Association, define a "Green Loan" as any type of loan instrument made available exclusively to finance or refinance, in whole or in part, new and/or existing eligible green projects. By continuing to use our website, we understand that you are happy for us to do this. Sustainability indicator has been independently verified by the agency, This page was last edited on 29 June 2020, at 06:12. Based on the categories provided in the GBP of 2017, the appendix consists of a non-exhaustive list of categories of eligibility for Green Projects, including clean transportation, renewable energy, pollution prevention and control. The reward and penalty regime of a margin ratchet linked to success or failure in meeting ESG-based performance targets is an essential element in giving credibility to this loan product as a driver of better corporate behaviour. [9][10], Lending dependent on environmental criteria, Green Lending: Top 10 Reasons Why Banks Lend to Sustainable Buildings, Green Wombat: Bank of America Commits $20 Billion to Green Lending, "Credit Agricole closes first two U.S. Green loans", "Green Loan Principles to Guide Environmental and Sustainability Finance", "ING and Philips collaborate on sustainable loan", "Philips agrees €1bn loan with interest rate linked to sustainability performance", "Going Greener Can Get You Cheaper Loans at This Dutch Bank", "The green and sustainability loan market: ready for take-off", https://www.bbva.com/en/bbva-signs-new-sustainable-loan-italy-a2a/, https://www.eticanews.it/in-breve/un-altro-sustainable-loan-per-le-utility-italiane-tocca-ad-a2a/, https://en.wikipedia.org/w/index.php?title=Green_lending&oldid=965066488, Articles with dead external links from January 2018, Articles with permanently dead external links, Short description with empty Wikidata description, Creative Commons Attribution-ShareAlike License, Philips's sustainability performance and rating provided by. Extended its maturity period until 2023 (open to a possible extension). Is this just another element to price competition within the corporate lending market? We are an experienced second-party opinion provider and can qualify your project as green. This is evident in the insightful material we produce and news coverage we receive. is in order. Please try after sometime. This website uses cookies to improve your experience while you navigate through the website. If the targets are reached on all scores, the interest rate goes down —and vice versa. Access all of the content that you have previously selected to bookmark. A meat supplier needs to replace refrigeration systems for more energy efficient alternatives – another green loan. Social Bonds are those used to finance or refinance Social Projects and Sustainability Bonds are those where proceeds are applied to a combination of both Green and Social Projects. Partially index-linked to the environmental, social and corporate governance impact of the company. After green bonds becoming an increasingly common financing instrument, there is a growing demand by borrowers for green loans. Our team of experts is ready to answer your questions: As you formulate a Green Loan Framework, our team of experts reviews the framework to ensure that it aligns with the Green Loan Principles, especially in the intended use of proceeds. What’s On The Mind of Third Party Agents? Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction. The SLLPs however reflect the independence and flexibility of the loan market – because they describe a product for which there is already an active market, i.e. The International Capital Markets Association (ICMA) supported the LMA and the APLMA with the development of the GLP. BBVA led the transaction as lead arranger and sustainable facility agent.

Our second-party opinion ensures the green credentials of your use of proceeds. For press inquiries and info, click here. Our experience over the past year has shown large corporate borrowers to be the focus of attention. Green Loan Principles 21 March 2018 Introduction The wholesale green loan market aims to facilitate and support environmentally sustainable economic activity. The bigger the ESG linked market, the more likely it is that true green purpose projects will emerge in the corporate lending space, accelerating demand for GLP financing and increasing momentum in favour of favourable capital treatment for the sector. The cost is linked both to targets on green investments and to progress made on sustainability initiatives. These project finance facilities aren't however badged as "Green Loan" facilities – but arguably they are ultra-green, as the consequence for a project company that fails to adhere to the covenants which underpin the four GLP pillars would be a clear event of default and not simply the inability to market or represent the loan as a Green Loan. However, by mentioning "when appropriate" as well as the possibility of self-certification, the GLP recognise that in the (green) loan market lenders tend to have broad working knowledge of a borrower and its activities. It may be though that the "true" Green Loan (GLP) market can gain increased traction building from the SME space.