Frasers Property’s subsidiaries Frasers Property AHL (FPAHL) and Frasers Property Industrial Australia (FPIA) have jointly secured an A$300 million syndicated sustainability linked loan ($309.41 million).
The loan also has an accordion option of A$25 million.
The loan was issued according to the Sustainability Linked Loan Principles by the Loan Market Association, Loan Syndications and Trading Association and the Asia Pacific Loan Market Association.
Under the five-year loan, interest cost will be reduced from the second year onwards if both FPA and FPIA maintain a four-star rating or above in each of their Global Real Estate Sustainability Benchmark (GRESB) Development report and GRESB Standing Investments report.
The Clean Energy Finance Corporation (CEFC), which invests on behalf of the Australian government to reduce emissions across the economy, participated with A$75 million in the loan.
The funds from CEFC will be used to deploy clean energy technologies in two Australian industrial projects that will reduce embodied carbon, cut operating emissions and deliver zero carbon energy electricity for tenants at no additional cost.
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In addition, distributed energy generation models will be installed at Rubix Connect Estate in Victoria and The Horsley Park Estate in New South Wales to deliver carbon neutral electricity through onsite solar, battery storage and a biodiesel generator.
Frasers Property energy retailer Real Utilities will provide Climate Active certified carbon neutral electricity to the properties’ common areas and its tenants.
Loo Choo Leong, group CFO of Frasers Property, says that the organisation wants to incorporate sustainability into every aspect of its business, including financing.
“The Clean Energy Finance Corporation’s (CEFC) participation in this syndication is an important recognition of the Group’s sustainability credentials in Australia,” he says.
The loan marks Frasers Property’s fifteenth green and sustainability-linked financing since its first green loan raised in September 2018. As at Dec 31, 2020, the group had secured green and sustainability-linked financing totalling $4 billion.
The group has a net-zero carbon target by 2050, with FPA and FPIA having net-zero carbon targets in development and operation by 2028 and 2030 respectively.
Shares in Fraser Property closed 3 cents or 2.46% higher at $1.25 on April 16.
