MUFG has acted as Original Lender and Arranger for the first ever Polish ESG-linked loan, valued at zł2 billion (€460 million) for Polish Energy Company, Energa.
Energa signed the ESG-linked revolving credit facility agreement with a consortium of five banks in an ESG formula; a rating of corporate social responsibility for the business and promotion of balanced governance.
This is the first ever Polish Sustainability Linked Loan, and is of particular prominence as it will revolutionise Poland's approach to power generation, which currently relies heavily on coal; over 80% is produced in this way.
This pioneering deal is expected to set a new trend in Poland and future relationship-defining loan facilities within the Polish power and utilities sector given the acceleration of decarbonisation in the region and the aim to reduce carbon footprint in the near future.
The RCF has been granted to Energa on the condition that the funds must be used for purposes not related to coal-fired power generation. The assessment of ESG indicators will be carried out annually by Vigeo Eiris, an independent international rating agency that specialises in ESG. The credit margin of the loan is partially linked to the borrower's fulfilment of ESG objectives related to Energa's results in environmental activities, social responsibility and quality of corporate governance.
Christopher Marks, Head of Emerging Markets at MUFG EMEA, said:
"This is a pioneering transaction in Poland, and we are glad to see that the region is transforming into a low carbon economy.
"MUFG is proud to join the exclusive group of lenders on the first ever credit facility of its kind for the country, which sets a new trend in bank financing in the mature and super liquid Polish loan market. We hope that our business with this region only continues to grow."
The additional banks involved in the financing of this facility include Santander Bank Polska S.A., Bank Gospodarstwa Krajowego (Polish Development Bank), PKO Bank Polski SA, Caixabank SA oddzial w Polsce, and MUFG Bank (Europe) N.V.