Thames Water ties interest to sustainability performance

Thames Water has signed a £1.4bn 5-year revolving credit facility (RCF), with the interest rate linked to annual performance against ESG metrics.

The agreement sees the company become the first UK corporate to tie the interest rate it will pay on the RCF to its Infrastructure GRESB score (Global Real Estate Sustainability Benchmark). Outperforming the benchmark will result in a lower interest rate, with any financial gains boosting Thames Water’s charitable fund.

The new facility matures in 2023 and has been provided by a syndicate of 13 banks, co-ordinated by BNP Paribas.

Cecile Moitry, director of Sustainable Finance and Investment at BNP Paribas CIB, said: “We are proud to support Thames Water in advancing its environmental and social objectives through this innovative transaction. It’s a tangible example of where financing can be aligned with positive impact incentives to encourage sustainable activities.”

During the last two years, Thames Water has seen a 51 per cent change in ownership, appointed an independent chairman and refreshed its executive team. As part of its new approach, Thames Water is in the final stages of a major review of governance, with a board restructure and the closure of its Cayman Islands subsidiaries almost complete.

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