Contact Energy and MUFG Bank have agreed a four-year, NZ$75 million sustainability-linked loan, the first of its kind in New Zealand for MUFG.  Contact now have two sustainability-linked loans, totalling NZ$125m.

Sustainability-linked loans (SLLs) are a relatively new, but rapidly growing, form of sustainable finance.  They are loans which have a target or performance-based component included in their pricing. The SLL is tied to Contact’s environmental, social and governance (ESG) performance, as measured by the independent rating agency RobecoSAM. If Contact achieves the ambitious targets set out in the SLL, a benefit of reduced loan pricing will apply.  Conversely, if Contact fails to uphold minimum agreed levels of performance, it will pay higher interest costs.

Contact Energy’s Corporate Treasurer, Karina Witty, says Contact is committed to improving its ESG credentials, for the benefit of all its stakeholders.

“We are proud of our commitment to continually improve our environmental, social and governance practices. We know ESG credentials enhance the ability for a broad group of stakeholders to assess how Contact operates.  Having our SLL connected to our ESG performance further incentivises this commitment,” Witty said.

“By entering into this SLL, Contact and MUFG are contributing to the development of this innovative bank lending market, which will help tackle climate change.”

"MUFG is pleased to work with Contact to drive better environmental and social outcomes, and enhance corporate governance, which in turn support's New Zealand's climate change targets," said Nick Congdon, Managing Director, MUFG Auckland branch.

Congdon added that ESG financing is at the very core of MUFG’s mission and strategy, which has a commitment to invest ¥20 trillion (~US$ 188 billion) into sustainability related financing by 2030."

Global Sustainability Linked Loan volume in 2020 was USD141.9bn in 2019, a 5.3% increase from 2019.

Media enquiries
Contact Energy
Leah Chamberlin-Gunn
+64 21 2277991

MUFG Bank
Phillip Anderson
+61 403 684 386