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ESB has inked a €1.4bn sustainability-linked loan deal aimed at pushing the Irish state-owned energy firm to deliver on its emissions goals and scale up its renewable energy capacity.
As reported by BusinessGreen.com, the five-year agreement marks the ESB's first syndicated sustainability-linked loan, for which the interest rate paid will be dependent on the firm's performance against a range of green targets set out in its 2030 Brighter Future Strategy.
The targets include reducing the carbon intensity of its power generation output by 40 per cent and increasing its renewable electricity generation by 170 per cent by 2026, both against a 2018 baseline.
ESB said its performance against these targets would be tested throughout the five-year lifetime of the green loan, with the potential for an interest rate reduction if the goals have been met. Equally, higher interest rates would be imposed if the goals are missed.
The loan deal agreed with French banking giant BNP Paribas refinances the ESB's existing revolving credit facility, and marks the energy company's second foray into green financing following the launch of its first corporate green bond last summer.
It comes as growing numbers of corporates have been striking sustainability-linked loan deals in a bid to encourage progress against environmental and climate targets.