BPEA ESTABLISHES ASIA’S FIRST SUSTAINABILITY-LINKED CREDIT FACILITY AT US$3.2 BILLION
The Facility, the first of its kind in Asia and one of the largest globally, underscores BPEA’s regional leadership in the sector as it seeks to drive ESG integration across its platform.
Hong Kong, 13th October 2021 – Baring Private Equity Asia (“BPEA”) announces today that it has successfully established a Sustainability-Linked Loan (“SLL” or “The Facility”) worth up to US$3.2 billion, with initial commitments of approximately US$1.5 billion. The Facility, which is the largest and most sophisticated to be launched in Asia by a private equity firm, will be subject to Sustainability Performance Targets (SPTs) that will reduce the interest rate of the loan if BPEA can achieve the objectives. Proceeds will be used to support the Firm’s private equity investment platform.
The SPTs focus primarily on gender diversity and climate change.
On gender diversity, BPEA will require its portfolio companies to build a stronger and more supportive environment for female talent to thrive.
To tackle climate change, BPEA’s portfolio companies will improve GHG emissions reporting, set climate targets, and ultimately drive emissions reduction. At the firm level, BPEA plans to create a long-term climate strategy to guide both its corporate activities and engagement with portfolio companies.
To lay a solid foundation for ESG improvement, another SPT will help BPEA further strengthen its investment process by integrating enhanced ESG risk and opportunity assessments to inform ESG action plans for each portfolio company.
Jean Eric Salata, Chief Executive and Founding Partner of BPEA, commented: “We hope this pioneering debt facility will set a precedent for the private equity industry, not just in Asia but globally. As a longstanding proponent of taking action on ESG, we recognize the correlation between strong, sustainable business practices and value creation. The Facility’s ambitious targets incentivize our Firm and our investee companies to aspire to higher standards while also encouraging long-term thinking on key topics like climate change to drive positive change for the communities in which we operate.”
“Sustainability and ESG permeate the firm and have done so since its inception,” commented Patrick Cordes, COO. “We are active owners, and we believe sustainability and ESG help build value in our portfolio companies. This Facility will enable us to be more transparent with investors about how we use that approach to drive value for all stakeholders.”
The Facility closed on October 7th. The Sustainability Coordinators were BNP Paribas and Standard Chartered.
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