Australia’s Endeavour Energy opts for sustainability-linked loan

The loan’s pricing conditions are tied to Endeavour Energy achieving a set of agreed sustainability performance targets.

The sustainability linked loan, the first to an Australian electricity distribution network provider, is worth Au$920 million (US$684 million) over five years.

The sustainability performance targets are focused on four areas including greenhouse gas emissions reduction, landfill waste diversion, net habitat gain and mental health and wellbeing.

For the greenhouse gas emissions sustainability performance target, Endeavour Energy has committed to achieve a 40% reduction in CO2e Scope 1 and Scope 2 emissions (excluding line loss related emissions) by 2030.

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Line losses account for around 96% of Endeavour Energy’s reportable Scope 2 emissions caused by upstream fossil fuel generation outside of the utility’s regulated control and are largely determined by the emissions intensity of the generation mix powering the grid but are also associated with the amount of electricity lost through the transmission and distribution networks.

A ‘gateway’ clause is included tied to reporting on initiatives that either improve line losses or contribute to the decarbonisation of the grid.

Endeavour Energy’s Chief Financial Officer, Francoise Merit, said the loan supports the company’s commitment to driving enhanced environmental performance and improved sustainability outcomes.

“These sustainability performance targets underpin our corporate strategy and are an effective tool for driving sustainability throughout our business as we work towards a net zero future.”

Endeavour Energy supplies power to over 2.6 million people living and working in Sydney’s Greater West, the Blue Mountains, the Southern Highlands, Illawarra and the south coast of New South Wales.

In a statement the company says the grid improvement and decarbonisation initiatives reflect Endeavour Energy’s increasing role in facilitating and better supporting localised renewable energy generation from its customers through the use of new technologies and markets, including community batteries, localised Distributed Energy Management Systems (DERMS) and digital technology systems to optimise voltages on the network.

The joint sustainability coordinators and mandated lead arrangers for the loan are Commonwealth Bank of Australia and Australia and New Zealand Banking, as part of a syndicate of a total 17 banks.