Baring Asia creates sustainability-linked credit facility

The sustainability performance targets primarily focus on gender diversity and climate change. BPEA must require portfolio companies to create stronger and more supportive environments in which female talent can thrive and to take steps that drive greenhouse gas emissions reduction.

The loan – which includes a first tranche of approximately $1.5 billion – is the largest sustainability-linked credit facility issued to a private equity firm in Asia, but not the first of its kind. Two years ago, ING established a $65 million revolving capital call facility for Quadria Capital with interest rates pegged against environment, social, and governance (ESG) performance targets.

These products are gaining traction globally. Intermediate Capital Group and Nordic Capital have both launched facilities tied to ESG outcomes since the start of the year, while The Carlyle Group recently agreed a EUR2.3 billion ($2.7 billion) loan for its European private equity and real estate platform where the ESG targets include achieving 30% female representation on portfolio company boards.

BPEA said its facility would lay foundations for ESG improvement across the portfolio and strengthen investment processes by integrating ESG risk and opportunity assessments into action plans. The sustainability coordinators were BNP Paribas and Standard Chartered.

“As a longstanding proponent of taking action on ESG, we recognize the correlation between strong, sustainable business practices and value creation,” said Jean Eric Salata, CEO and founding partner of BPEA, in a statement.

“The facility’s ambitious targets incentivize our firm and our investee companies to aspire to higher standards while also encouraging long-term thinking on key topics like climate change to drive positive change for the communities in which we operate.”

BPEA has $34 billion in assets under management across private equity, real estate, and credit. The firm is currently raising its eighth pan-Asian PE fund, which has a target of $8.5 billion.

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• Topics
• Financing
• Buyout
• GPs
• Baring Private Equity Asia
• ESG
• diversity & inclusion (D&I)
• Leveraged finance
• Asia