Citi, StanChart Arrange First Impact Loan with Both Use-of-Funds, Sustainability-Linked Criteria for Actis
Sustainable infrastructure investor Actis announced that it has secured a $1.2 billion “hybrid” impact-linked revolving credit facility for its latest energy fund, Actis Energy 5. The facility includes aspects of both sustainable-labelled instruments and sustainability-linked debt, including both criteria for investible projects, as well as incentives for hitting ESG performance targets.
Global financial services company Citi and international bank and financial services company Standard Chartered acted as lead Arrangers and joint Sustainability Coordinators on the deal.
Val Smith, Chief Sustainability Officer at Citi, said:
“This facility represents the cutting-edge of sustainability-linked credit facilities, and incorporates stringent measurement criteria from the award-winning open-source Actis Impact Score. It’s a pleasure to be part of such an innovative initiative at a critical time for climate action, which also aligns with Citi’s Sustainable Progress Strategy and commitments to a low-carbon future. We hope this pioneering facility encourages others to follow suit in private markets.”
Jonathan Donne, Global Head of Strategic Investors Group at Standard Chartered Bank, added:
“We are delighted to have partnered with Actis on this subscription finance facility, which incorporates clearly defined ESG performance targets, reflecting Actis’ commitment to investing in the energy transition. Climate change continues to present a significant challenge globally and we will continue to innovate our sustainable finance offering to support the evolution towards a sustainable future.”
The Actis Energy 5 fund recently closed with $6 billion of investable capital. The fund’s investment strategy will target sustainable infrastructure projects that contribute to the UN Sustainable Development Goal (UNSDG) 7 – Affordable and Clean Energy.
The new facility is the first to combine both eligibility criteria for projects that can be funded by the facility (“use-of-proceeds format”) with a margin adjustment mechanism that incentivizes impact outcomes, which will be assessed using the Actis Impact Score (AIS) methodology (“sustainability-linked format”). AIS aligns investment impact with the UNSDGs and it is used throughout the lifecycle of an investment to ensure that the impact intent is clear across the firm.
Actis stated that any drawing under the new facility will qualify for a “use of proceeds” margin benefit from the point in time that the drawdown is made but only if it can be used within one or more measurement criteria, including investing in an energy sector that contributes to climate change mitigation, investing in a country where energy access is limiting economic growth, or creating a new positive impact as determined by the AIS.
Shami Nissan, Head of Sustainability at Actis, said:
“This new credit facility represents the latest in the evolution of sustainability-linked financing, charting a new course when it comes to financing private market investments in the energy sector. It will mean our latest energy fund is fully incentivized to invest in a just and equitable energy transition, and that these investments deliver meaningful positive impact for the environment and society, and further support our mission of transforming infrastructure for a better tomorrow. The deal is a collaboration between the Actis sustainability and banking teams, and we are delighted to have attracted such a strong syndicate of banks to support us.”