This article is from the Australian Property Journal archive
REAL estate investor and fund manager Cromwell Property Group will transition to its first green loan as part of its new sustainable finance framework.
The inaugural transaction under the framework will see an existing $130 million bilateral loan with Commonwealth Bank of Australia transformed into a green loan certified by the Climate Bonds Initiative.
“The Climate Bonds Low Carbon Buildings Criteria was designed with an ambition of a zero-carbon future in 2050,” said Lara Young, head of ESG at Cromwell.
“Obtaining this type of loan requires issuers, like Cromwell, to embed transformative steps, not incremental improvements, for rapid decarbonisation. Only the top 15% most emissions efficient buildings in a city can qualify for green loans certified by the Climate Bonds Initiative.”
The bilateral loan with CBA is on the Cromwell Riverpark Trust, which is underpinned by Brisbane’s Energex House, has now been extended for a further two years, with all other terms remaining the same.
“Energex House is an industry leading Green Star 6 star, and 6-star NABERS Energy rated, building. By extending the term of the facility for a further two years under a green loan, we will continue to improve its sustainability performance,” added Young.
The sustainable finance framework is set to enhance the group’s borrowing practices through the use of sustainable debt instruments such as green bonds and loans, as well as sustainability linked bonds and loans.
“Cromwell’s Sustainable Finance Framework will support the Group’s commitment to fund low-carbon, efficient and resilient buildings that meet our ESG ambitions,” added Young.
“By leveraging green or sustainability linked debt, Cromwell Property Group can move significantly closer to meeting our current and future ESG responsibilities, including a Cromwell portfolio Net Zero Scope 1 and 2 target for 2035.”
The framework was developed in consultation with Commonwealth Bank of Australia and French-based multinational financial services company Societe Generale.
“One of our priorities is to play a leading role in supporting Australia’s transition to a modern, resilient, and sustainable economy, and key to that is supporting high quality green buildings in the commercial property sector,” said Jane Thomson, general manager of corporate finance and ESG at CBA.
“There are enormous benefits for an organisation in accessing the vibrant sustainable finance markets and we are pleased to have supported Cromwell’s inaugural green loan under the new framework for the Energex House asset.”
The move comes days after Cromwell Property Group and Australian Unity struck a deal to merge unlisted REITs to form a new fund valued at $1.1 billion.