Green Loan Demand Surging
(22 June 2018 - Asia) The Green Loan Principles published recently by the Asia Pacific Loan Market Association (APLMA) are set to increase demand for sustainable finance, particularly in Asia.
Deal flow for both green loan and ESG transactions is increasing sharply, headlined by Macquarie Group who issued a £2 billion loan facility, including a £500m facility to finance green projects with green tranches. The facility is to be used to support renewable energy projects initially, and energy efficiency, waste management, green buildings and clean transportation projects in the future.
Macquarie is the first financial institution to issue a green loan under the Green Loan Principles which are intended to be used as a benchmark for the wholesale green loan market, setting out a clear framework of recommendations to be applied by market participants on a deal-by-deal basis depending on the underlying characteristics of the transaction. The principles are based on four core components including Use of Proceeds, Process for Project Evaluation and Selection, Management of Proceeds and Reporting. Macquarie intends to utilise market-leading, proprietary green impact assessment and reporting for eligible projects, developed by its Green Investment Group.
Macquarie is the first financial institution globally, and the first Australian company, to issue a green loan under APLMA Green Loan Principles. The loan saw strong demand from global financial institutions, particularly in Asia. In 2017 Macquarie acquired the UK's Green Investment Bank (now Green Investment Group or GIG), further strengthening its own existing green finance activities. Macquarie has led more than £15 billion of investment in green infrastructure since 2010 and has supported the creation of 20GW of green energy capacity with a further 7GW in its pipeline. Macquarie is also the world's number one global renewables adviser. Alex Harvey, Macquarie's CFO said: “This transaction further demonstrates the leading global role Macquarie is playing in the growth of green finance and the development of new renewables capacity. The future utilisation of our Green Investment Group's market-leading Green Impact Assessment approach is another example of the value delivered by our acquisition of GIG in 2017.”
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