Port of Newcastle, Sustainability Linked Loan and Green Loan Facility

In May 2021, the Port of Newcastle became the first Australian seaport to secure sustainability linked financing through a A$666 million refinancing facility funded by a consortium of lenders, with the National Australia Bank as a core lender and sustainable finance structuring coordinator (Port of Newcastle, 2021; National Australia Bank, 2021). The transaction included A$515 million in sustainability linked loans and up to A$50 million in green loans, and the sustainability linked loan was the first globally to align with the ICMA Climate Transition Finance Handbook. The sustainability linked component incentivized performance through reduced debt margins where the port met targets across environmental and social KPIs.

KPIs included, among others, maintaining Scope 1 and 2 greenhouse gas emissions below a trajectory aligned with a Well Below 2 degrees Celsius scenario, screening 100 percent of suppliers for modern slavery risk, establishing an Aboriginal and Torres Strait Islander student internship program, accrediting mental health first aiders in each company department, and demonstrating progression under the New South Wales Government Sustainability Advantage Recognition Scheme (Port of Newcastle, 2021). The announcement describes A$595 million of facilities with two and a half year and five year tenors, alongside up to A$50 million in new green lending. The targets were set at the time of the transaction; their later achievement has not been verified.

The green loan component was intended to support diversification and green projects, including green building projects and diversifying the port's revenue base (Port of Newcastle, 2021). Lower debt margins were conditional on meeting sustainability targets; realized savings are not established by the announcement.