Christchurch International Airport Limited has successfully completed the re-financing of an existing debt facility with Westpac, at the same time converting it into its first sustainability linked loan.
Chief financial officer Tim May says signing its first Sustainability Linked Loan with Westpac is a milestone achievement that financially incentivises the airport to meet agreed sustainability targets.
This is not a new loan, but the first step in CIAL taking the opportunity to incorporate its ambitious sustainability targets into its financial strategy. Conversion of other existing facilities will be considered as they mature over time.
"This is another way Christchurch Airport is demonstrating a sincere commitment to sustainability. Rather than just rolling over some maturing facilities on the same terms, we’re putting our money where our mouth is," Tim says.
The Sustainability Linked Loan means the financial terms of the Westpac loan are linked to whether the airport achieves its ambitious goals for carbon reduction, renewable energy generation on its campus and energy efficiency.
The airport’s progress will be subject to independent scrutiny and if it achieves its targets, it will receive lower funding costs in respect to this facility. If it doesn’t, this facility will be charged at a higher interest rate.
"Yes, they may be ambitious, but we back ourselves to achieve our agreed SLL targets – alongside the many goals we’ve set and achievements we’ve made in sustainability. That includes being the first airport in the world to achieve the highest level of carbon reduction for an airport," says Tim.
"We know many stakeholders are becoming increasingly interested in companies demonstrating commitment to sustainable outcomes. Converting this facility with Westpac allows us to join several other leading businesses who’ve already shown their focus on championing sustainable finance practices in New Zealand.
"Our airport team daily demonstrates best practice in sustainability, so has made it possible for us to commit to this refinancing. Every member of our team has an impact on sustainability outcomes. That has given our finance team confidence to sign up to the Sustainability Linked Loan and we’d like to thank Westpac for their support of this re-finance move."
Westpac NZ head of sustainable finance Joanna Silver says the financial incentives associated with this type of lending mean sustainability stays front and centre of an organisation’s thinking.
"It’s great to see companies like Christchurch Airport putting sustainability at the heart of their balance sheet," she says.
"It keeps them focussed on the things they want to achieve and sends strong, positive signals to customers, employees and shareholders."
