Thames signs £1.4bn credit facility with interest tied to green and social goals

Thames Water has signed an £1.4 bn credit facility with its interest rate that can be lowered by outperforming environmental, social and governance benchmarks.

According to Thames the five-year Revolving Credit Facility (RCF) makes the company the first in the UK to link the interest it pays to its score against an independent, external infrastructure Global Real Estate Sustainability Benchmark (GRESB). The facility – signed to for general corporate purposes– matures in 2023, with extension options to 2025. A syndicate of 13 banks, co-ordinated by BNP Paribas has provided the facility.

When the company outstrips the benchmark it will pay a lower interest rate. The financial gains will go to Thames Water’s charitable fund which last year donated more than £103,000 to 21 water and environment charities and community groups in London and the Thames Valley.

GRESB is an independent, external ESG benchmark which assesses the sustainability performance of real estate and infrastructure portfolios and assets worldwide. With a score of 86/100 in 2018 for infrastructure, Thames Water ranked 3rd in Europe out of 173 participants.

Thames Water’s chief financial officer, Brandon Rennet, said: “Over the last two years we’ve set a new strategic direction to build trust in Thames Water as a responsible water and wastewater services provider. This facility closely follows the creation of our Green Bond Framework and underlines our commitment to sustainability and the pursuit of the UN Sustainable Development Goals.