ESG-linked Syndicated Credit Facilities
Loans that become cheaper the more sustainable the borrower performs
Project Facts
Location
Austria
Project Volume
>250 Mio. EUR
Applied Financing Solutions
Market-Rate Loans
Project Dates
Start: 2018
In operation since/from: 2018
The Story
The Austrian subsidiary of the international ING banking group played a key role in coordinating the first ESG-linked syndicated credit facilities in Austria. These are large loans jointly financed by several banks where the interest rate is at least partially linked to the sustainability performance of the borrower. If the company's environmental, social and corporate governance (ESG) performance improves, according to an independent sustainability rating agency, the cost of the loan is reduced. This means that there is a decoupling from the usual financial rating.
This type of green loan was first used by ING in the Netherlands in 2017. In Austria, the premiere was at the end of 2018 with a loan of 500 million euros to the energy utility Verbund. In 2019, a second ESG-based loan of one billion euros was granted to the steel company voestalpine.
Success Factor | Hero Moment
The green loan to Verbund was not only the first of its kind in Austria, it was also the first loan worldwide to be assessed exclusively on the basis of ESG criteria. Through partnerships like these, ING's goal is to become the industry leader in green finance.
Submitter
ING Austria, Austria
Other Involved Stakeholders
Verbund AG, voestalpine AG
Contact Mail
info@ing.at
Website
www.ing.com/sustainability
Keywords
Innovation, Green Loan