Mace secures £60m sustainability-linked loans to support overseas growth

Mace secured two sustainability-linked loans worth a combined £60m to support its overseas growth and environmental projects – one of the biggest deals of its kind, according to the company.

Through an agreement with Spanish bank BBVA, Mace secured two “ESG-related liquidity funding facilities”, the largest worth £50m and funded by JP Morgan through the Development Guarantee of Exports (EDG), and supported by UK Export Finance (UKEF) .

The second facility is a £10 million revolving credit facility signed by BBVA. The Spanish bank acted as sustainability coordinator for both facilities.

Loans are linked to three environmental, social and governance (ESG) key performance indicators, which measure the company’s performance in reducing carbon emissions, increasing the use of renewable energy and improved health and safety performance.

Mace’s work against these KPIs will be tracked, influencing the rate of interest paid on the facilities, the agreement intended to further incentivize the company to meet its ESG performance targets.

It represents another major deal for construction companies that have recently been looking for different methods to fund work to become more eco-responsible.

Mace Group Chief Financial Officer, Richard Bienfait, said: “We are delighted to enter into this agreement with BBVA and JP Morgan, which will support our overseas growth and our important sustainability priorities.

“As a purpose-driven company, Mace is committed to doing everything in its power to pursue a sustainable world – and this historic funding agreement reflects that ambition.”

Elena Guillem, head of global relationships for Mace Group at BBVA UK, said the Spanish bank was “delighted” to work with Mace and help find “coherent financing alternatives” to help with its engagement. to add value to society and the environment.

John Meakin, Global Head of Export and Agency Finance at JP Morgan, added: “We are delighted to achieve this ‘first’ with Mace, BBVA and our long-standing ECA partner, UKEF, which builds on the of the company to support the transition to a lower market. – the carbon economy.

Mace announced last year that it had achieved net zero carbon status in 2020, thanks to a significant reduction in emissions from its own operations and the use of benchmark carbon offsets.

The company is committed to maintaining its net zero position, reducing its operational carbon and working with its customers to eliminate more than one million tonnes of carbon from the work it provides on their behalf by 2026.

Cash-based financing facilities give businesses the ability to borrow money at short notice, but do not automatically register as debt in financial accounts, acting instead as a reserve of cash.

These sustainability-linked loans can be tied to certain KPIs that focus on the borrower’s general business rather than a specific project.

In October 2021, Balfour Beatty announced it had secured the industry’s ‘largest sustainability-related loan’, worth £375m. This was after converting its existing revolving credit facility.

In the same year, Willmott Dixon secured a revolving credit facility worth £50 million, linked to its net zero carbon commitments.