Contact Energy (Contact) now has New Zealand’s largest group of Sustainability Linked Loans (SLLs) after converting its remaining NZD$305m of bank facilities to SLLs.
This conversion takes its current ANZ ($65m), BNZ ($50m), CBA ($60m), CCB ($60m) and Mizuho ($70m) facilities and converts them to an SLL with each bank. These will be governed by the same framework as Contact’s existing SLLs with Westpac ($50m) and MUFG ($75m). Contact’s total SLLs now amount to NZD$430m, which is the largest in New Zealand.
A form of sustainable finance, SLLs are growing in popularity in New Zealand and globally. All of Contact’s SLLs are tied to its performance in environmental, social and governance (ESG) domains as measured by the independent rating agency RobecoSAM. Contact will receive lower funding costs across its bank facilities, provided it meets the predetermined ESG targets. If Contact does not achieve the targets, and ESG performance falls below a predetermined threshold, the loans will be charged at higher interest rates.
“We have a deep commitment to achieving our ESG targets as Contact Energy leads the way in New Zealand’s decarbonisation” said Will Thomson, Contact Energy’s Corporate Treasurer.
“We would like to thank the banking group for their support in converting all of our loans into a sustainability linked format. We know stakeholders are increasingly interested in companies who are committed to sustainable practices. These loans form part of our Green Borrowing Programme and the conversion to SLLs further demonstrate our dedication to leading sustainable finance in New Zealand.”
Contact’s sustainable finance initiatives reflect and align the company’s capital with its sustainability ambitions, such as its verified science-based target of committing to having 95% renewable generation by 2025. This is the type of decisive action its stakeholders want to see, as Contact works hard to take care of the environment and communities while also delivering great value.