BNP Paribas, a leading global bank, announced that it has recently closed an amendment to add sustainability-linked incentives to its Letter of Credit (“LC”) Facility with renewable power producer, Northland Power Inc.
Also Read: BAE Systems to Bring Next-Generation Electric Drive System to Heavy-Duty Industrial Vehicle Market
Northland converted its $50 million bilateral LC Facility with BNP Paribas to a sustainability-linked agreement, which is backed by Canada’s export credit agency, Export Development Canada (“EDC”). This marks EDC’s first sustainability-linked LC facility, which will support Northland’s current and future renewable energy growth strategy, including offshore wind projects across the globe. EDC’s bonding solutions, offered in partnership with private sector financial institutions, help free up the working capital that companies need to operate.
This LC facility also represents Northland’s second sustainability-linked credit facility, after Northland renewed, extended and converted its CAD $1 billion revolving credit facility (“RCF”) to a sustainability-linked loan (“SLL”) structure in September 2021. The SLL structure aligns with Northland’s Green Financing Framework, unveiled in the first half of 2021. The five-year RCF features a pair of KPIs with targets linked to increasing Northland’s renewable energy generation and reducing carbon intensity. BNP Paribas acted as a co-sustainability structuring agent on the SLL.
“EDC is pleased to partner with BNP Paribas through our bonding program to support Northland Power as it scales up its renewable power generation capacity,” said Guillermo Freire, Senior Vice President, Mid-Market, and responsible for EDC’s cleantech practice. “This sustainability-linked LC facility for Northland Power is a good example of how industry partners can work together to help Canadian companies grow internationally, support the global energy transition, and help build an innovative and sustainable future.”
Northland continues to progress its plan to double its renewable power generating capacity by the end of the decade. Northland’s plan includes developing and operating a portfolio of large- scale offshore wind projects in Europe and Asia, further adding to its offshore wind portfolio, where it is already the fourth largest owner and operator generating capacity globally.