Spanish infrastructure and renewable company ACCIONA announced that it has secured a series of ESG-linked financing agreements, for a total of €3.3 billion, underwritten by a broad syndicate of 23 banks.
The financing arrangements come as ACCIONA prepares for the planned IPO of its renewable energy subsidiary, ACCIONA Energía. According to the company, the deals will enable ACCIONA Energía to become financially independent once it is a listed company, while also allowing ACCIONA to reorganize its financial structure in advance of the repayment of a significant portion of its bank debt with the net funds it will receive in due course following the placement in the market of a minority stake in ACCIONA Energy.
The deals include €800 million for ACCIONA, consisting of a €200 million term loan and a €600 million revolving credit line, and €2.5 billion for ACCIONA Energía, in the form of a 3-tranche credit facility including two 3-year €1 billion term loans, and a five-year revolving credit line with a ceiling of €500 million.
Sustainability linked loans and securities are an emerging form of sustainable finance instruments, with attributes including interest payments tied to an issuer’s achievement of specific sustainability targets. According to the terms of the deals, pricing on the financings can be substantially reduced if certain criteria are met, including ESG factors, as well as leverage and ratings. According to the company, the ESG criteria uses an innovative ESG “double impact” mechanism linking reductions to the achievement of corporate sustainability goals and also to generating a positive local impact.
The ESG criteria include ACCIONA Energía’s ESG target to align 95% of its investments with the European taxonomy of low-carbon activities, and ACCIONA Group’s target of a 60% reduction in greenhouse gas emissions by 2030. The “local impact” targets include tree planting and conservation to compensate emissions from business operations for ACCIONA Energía, and training vulnerable groups and providing clean energy for isolated rural communities for ACCIONA.
According to ACCIONA, the loans represent the largest social impact facilities in the Spanish market, and the first to include corporate and local targets.