CLP Power secures HK$1b emission reduction-linked loan

The loan was the first ESG-linked facility in the Japanese financial market.

CLP Power Hong Kong Limited (CLP Power) announced it closed a HK$1b, approximately JPY15b, worth of emission reduction-linked term loan facility in Japan.

The company marked this as the first environmental, social, and governance (ESG)-linked facility secured in the Japanese financial market.

“We are definitely seeing a growing interest in sustainable financing from investors and banks as a result of a sharper consideration of ESG factors, alongside financial factors, in their investment decision-making process,” Nicolas Tissot, CFO of CLP Holdings Limited, said.

He added the loan is in line with the company’s commitment to work with key stakeholders to bring a more socially-responsible, sustainable financing to support its decarbonisation investments, under its Climate Vision 2050.

The transaction was closed on 22 March 2022. It is also CLP Power fourth direct cross-border loan secured from regional and city banks in Japan.

CLP Power had earlier arranged three separate cross-border loans worth JPY12b in 2013, JPY26b in 2014, and a US$125m in 2015 in the country.

The terms of the latest facility included performance targets linked to levels of air emissions, including sulfur dioxide, nitrogen oxides, and respirable suspended particulates, within a reducing annual maximum output level.

The ESG-linked loan facility also includes features such as the HK$4.4b of emission reduction-linked facilities arranged by CLP Power and Castle Peak Power Company Ltd. in 2021