ESB Signs First Sustainability Linked Loan
- ESB is first Irish utility to have a syndicated sustainability linked loan (SSL)
- Latest funding transaction is part of group’s Green Finance strategy
Dublin, 28 February 2020
ESB has announced the signing of a new EUR1.4bn 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.
As agreed with the lenders, 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.
To that end, ESB’s total renewable capacity is on target to increase to almost 1GW in the coming months once Grousemount Wind Farm in Co Kerry comes into commercial operation. Through a number of strategic partnerships, ESB is also progressing other renewable projects in solar, battery, onshore and offshore wind in Ireland and the UK.
Pat Fenlon, Executive Director, Group Finance and Commercial, said: “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.”
Engaging the customer in the transition to a low-carbon energy future is a key element to ESB’s Brighter Future strategy with ESB launching a number of initiatives across its varied businesses in recent months. These include a comprehensive upgrade of its EV charging infrastructure, launch of the 100% Green Electricity Price Plan and roll-out of the nationwide Smart Metering Programme.
“As always, we aim to meet customer energy needs by bringing the best of our capabilities together to deliver innovative and value-driven solutions for a low-carbon world,” added Mr Fenlon.
BNP Paribas acted as Sustainability Coordinator on the SLL and Billy Quinlan, Head of Global Banking Ireland, BNP Paribas said: “We are proud to work with ESB as they transition towards a low-carbon energy future, based on clean, reliable, affordable electricity. This SLL is a great example of how sustainable finance can be effectively deployed to support our clients’ efforts to contribute towards climate action, in line with the United Nations Sustainable Development Goals () and Principles for Responsible Banking ().”
Appendix 1 - - Banks participating in ESB’s SLL
- Allied Irish Banks
- Banco Bilbao Vizcaya Argentaria
- Bank of Ireland
- Barclays Bank
- BNP Paribas
- Danske Bank
- Intesa Sanpaolo Bank
- JPMorgan Chase Bank
- MUFG Bank
- Royal Bank of Canada
- Societe Generale
- Sumitomo Mitsui Banking Corporation
- 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. In addition, we extract further value through supplying gas, energy services and using our networks to carry fibre for telecommunications. ESB is the owner of the distribution and transmission networks in the Republic of Ireland (via ESB Networks) and Northern Ireland (via Northern Ireland Electricity Networks Ltd).