Waste management business Renewi has converted its main banking borrowing into a €550m (£483m) ‘green loan’, making it one of the first major companies to refinance its borrowings using this mechanism, where a lower interest rate is charged for meeting agreed environmental criteria.
It said it was the first UK company with a loan margin linked to achieving environmental and safety key performance indicators.
Renewi was created in 2017 by the merger of Shanks Group and Van Gansewinkel Groep.
Under the green loan’s terms, Renewi will benefit from lower payments on its borrowings if it achieves objectives agreed with lenders in: increases in recycling and recovery rates; growth in carbon avoidance; increase in fleet efficiency, reducing emissions; transition to a low polluting Euro VI fleet; and a reduction in the number of accidents requiring three days’ absence from work.
The loan lasts until May 2023 with options to extend into 2025, and is backed by lenders ABN, BNPPF, HSBC, ING, KBC and Rabobank.
Renewi chief financial officer Toby Woolrych said: “This facility secures our funding for the long term and demonstrates that our focus on sustainability is matched with our approach to financing.
“This summer we will be committing to ambitious new sustainability objectives and this facility ensures that, by giving new life to used materials, we can also reduce the costs of our funding.”