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Iberdrola raising record €5.3 billion Green loan

LONDON (Reuters) - Spanish utility Iberdrola SA is in the market with a €5.3bn amendment and extension of an existing loan which will be the biggest Green loan issued by a European company to date, bankers said.

The deal brings the volume of Green loans syndicated in Europe to around €15bn, a senior banker said, as the loan market plays catch up with the more active Green bond and Schuldschein markets.

The deal is Iberdrola’s second Green loan, after a €500m loan which was agreed with BBVA last February and was mostly used to finance projects linked to energy efficiency and renewables.

BBVA is also the facility agent and sustainability agent on the €5.3bn loan, which is being syndicated to around 25 banks.

Iberdrola was not immediately available for comment.

The loan is the latest in a string of Green loans syndicated in the last 12 months which also include a €1bn loan for Dutch technology company Philips Electronics and an €800m loan for Spanish utility Red Electrica.

Loans that are certified Green give companies access to a growing pool of investors and allow banks to show their commitment to socially responsible and sustainable businesses.

Environmental, Social and corporate Governance (ESG) investors and Socially Responsible Investors (SRI) avoid investing in projects that may harm the environment and actively focus on lending to companies and projects that have a positive impact.

Editing by Christopher Mangham