Endeavour Energy signs landmark $920 Million Sustainability-Linked Loan to become the first known Australian electricity distribution network to access sustainability linked financing

Endeavour Energy, via its financing entity, Network Finance Company Pty Ltd, has signed a landmark A$920 million five-year sustainability-linked loan (SLL) facility, becoming the first known electricity distribution network service provider (DNSP) in Australia to access sustainability linked financing.

Endeavour Energy’s Chief Financial Officer, Francoise Merit, said the SLL supports Endeavour Energy’s commitment to driving enhanced environmental performance and improved sustainability outcomes.

“Endeavour Energy is thrilled to lead the way with the first SLL in our industry. As the electricity network that builds, maintains and supplies power to over 2.6 million people living and working in the some of the fastest growing regions of NSW, we are committed to supporting a renewable and more sustainable energy future.”

The funds raised under the sustainability-linked loan can be used for general corporate purposes, however, the pricing of the loan is tied to the Endeavour Energy achieving a set of agreed sustainability performance targets focused on four areas including greenhouse gas emissions reduction, landfill waste diversion, net habitat gain and mental health and wellbeing.

“These sustainability performance targets underpin our corporate strategy and are an effective tool for driving sustainability throughout our business as we work towards a net zero future,” Francoise concluded.

In setting the greenhouse gas emissions sustainability performance target, Endeavour Energy has committed to achieve a 40% reduction in CO2e Scope 1 and Scope 2 emissions (excluding line-loss related emissions) by 2030. Line losses account for around 96% of Endeavour Energy’s reportable Scope 2 emissions caused by upstream fossil fuel generation outside of Endeavour Energy’s strictly regulated control and are largely determined by the emissions intensity of the generation mix powering the grid and are also associated with the amount of electricity lost through the transmission and distribution networks.

As part of the SLL, Endeavour Energy has welcomed a ‘gateway’ clause tied to reporting on initiatives that either improve line losses or contribute to the decarbonisation of the grid. These initiatives reflect Endeavour Energy’s increasing role in facilitating and better supporting localised renewable energy generation from its customers through the use of new technologies and markets, including community batteries allowing customers to store their excess renewable solar generation to be used at times of high losses, localised Distributed Energy Management Systems (DERMS) to optimise the balance of renewables on the system and digital technology systems to optimise voltages on the network to avoid renewable curtailment.

CBA and ANZ acted as Joint Sustainability Coordinators and Mandated Lead Arrangers, as part of a syndicate of a total 17 banks.

Commonwealth Bank Managing Director, Future Cities and Networks, Michael Thorpe, said Endeavour Energy oversees a piece of energy infrastructure that’s critical to Australia’s transition.

“We commend Endeavour Energy on its commitment to greater transparency around its emissions profile and ambition to reduce its carbon footprint while making its operations more sustainable. Supporting Australia’s decarbonisation journey while ensuring our country’s energy security is a strategic priority for CBA, and we are proud to support Endeavour in its efforts to advance to a net zero future.”

ANZ Executive Director, Sustainable Finance, Bronwyn Corbet said: “ANZ is pleased to be supporting Endeavour Energy in this transaction which is aligned to our strategy of supporting customers in their transition to net zero. We expect to see more of these deals in the energy sector as our customers look to implement sustainable finance solutions to accelerate their sustainability strategies.”

Facts about the Endeavour Energy network  

  • Supplies safe, reliable and affordable power to over 2.6 million people living and working in Sydney’s Greater West, the Blue Mountains, the Southern Highlands, Illawarra and the South Coast of NSW
  • Independently rated the most efficient DNSP in NSW, with reliability of 99.999%
  • Customer base spans over 25,000 square kilometres and is made up of more than 430,000 power poles and streetlight columns, 202 major substations and 32,600 distribution substations
  • connected by nearly 60,600 kilometres (more than the distance from Sydney to London and back) of underground and overhead cables
  • Integrates with renewable energy sources including 200,000 residential solar connections, industrial solar and embedded large-scale batteries.

Published on Mar 28th 2022