Finland’s national transmission system operator, Fingrid, has signed a €300m sustainability-linked loan (SLL) to help scale up climate change mitigation across the country. The revolving five-year credit facility aligns with the guidelines set out by the Sustainability Linked Loan Principles from the Loan Market Association.
This Revolving Credit Facility strengthens our position in enabling a clean, market oriented electricity system, as we move towards a period of record high investments.Jan Montell, Senior Vice President and CFO, Fingrid
The interest on the loan is linked directly to Fingrid achieving three specific measureable targets. These include an increase in connecting wind power to the grid and a reduction in greenhouse gas emissions from transmission losses, which represent circa 90% of Fingrid’s total emissions. The third KPI refers to a reduction in combined Lost Time Injury Frequency, assessed through own personnel and service providers (LTIF).
Finland is undergoing a rapid transformation of its economy with a national target to become carbon-neutral by 2035, one of the most ambitious the world. The role of the utility sector will be critical, with the government stating in 2019 that electricity and heat production in Finland should become nearly emissions-free by the end of the 2030s.
Through the material scope 2 emissions targets embedded in this sustainability linked loan, Fingrid is harnessing finance as a valuable net zero driver.Severine Mateo, Head of the Low-Carbon Transition Group, BNP Paribas
The International Energy Agency calculates that wind power currently accounts for under 15% of electricity generated by source. Fingrid’s latest SLL, which incentivises the scaling up of wind power connections, ultimately supports the country’s move to renewables and pathway to net-zero.
BNP Paribas acted as sole Sustainability coordinator and Documentation agent on the transaction, as well as joint Coordinator, joint Mandated Lead Arranger, and joint Bookrunner.
Jan Montell, Senior Vice President and CFO, Fingrid, said: “Sustainability is a core corporate value for Fingrid and present in everything we do. We definitely want to be part of the sustainable financing market now and in the future. This Revolving Credit Facility strengthens our position in enabling a clean, market oriented electricity system, as we move towards a period of record high investments. I also want to take this opportunity to thank our banking partners for their continued support and commitment to our first sustainable credit facility.”
Severine Mateo, Head of the BNP Paribas Low-Carbon Transition Group, highlighted: “Scaling up renewable energy in Finland is essential to meeting the country’s national climate commitments. Through the material scope 2 emissions targets embedded in this sustainability linked loan, Fingrid is harnessing finance as a valuable net zero driver.”