JLEN gets an ESG-linked credit facility – JLEN Environmental has agreed a new committed multicurrency revolving credit facility (RCF) of £170m and an uncommitted accordion facility of up to £30m. The money can be borrowed in both sterling and euros and at lower interest rates than the existing facility. The innovative thing is that the interest that will be charged in respect of the new facility is linked to the company’s performance on environmental, social and governance (ESG) measures. JLEN’s interest rate will rise or fall relative to its margin and commitment fee based on performance against defined targets. Those targets include:
- Environmental: increase in the volume of clean energy produced;
- Social: the value of contributions to community funds; and
- Governance: maintaining a low number of work-related accidents, as defined under the Reporting of Injuries, Diseases and Dangerous Occurrences (RIDDORS) by the Health and Safety Executive.
Performance against these targets will be measured annually with the cost of the facility being amended in the following financial year.
Lenders to the facility include three of the four existing lenders (HSBC, ING and NIBC) plus two new lenders (National Australia Bank and Royal Bank of Scotland International). The margin can vary between 195 basis points (bps – equivalent to 1.95%) and 205bps over SONIA (Sterling Overnight Index Average) for Sterling drawings and EURIBOR for Euro drawings, depending on performance against the ESG targets.