Peabody inks first environmental-linked loan

Peabody has secured its first loan tied to environmental goals, with a £70m facility from NatWest. The sustainability-linked loan requires Peabody to improve its SAP rating for building energy performance, and provide electric vehicle charging points on estates. The housing association must increase its average SAP rating to 75% by 2024/25, an improvement of 5%. In its three-year sustainability strategy, Peabody has committed to reaching an average SAP rating of 74.5 (EPC C) by the end of 2024, and reaching full net zero carbon (average SAP of 86/EPC B) by 2050. The company has also committed to providing 200 electric vehicles for company use, and doubling the number of charging points for both employees and residents by 2025. The deal builds on this with specific requirements for electric vehicle points, and requires the housing association to report this annually, in order to receive a discounted interest rate. The new agreement renews an existing tranche, extending the term to 10 years and increasing the funds available from £17.5m to £70m. It follows a previous £75m social impact loan from BNP Paribas, with interest rates tied to childcare training targets. Peabody is due to publish its first ESG report this autumn. Anthony Marriott, Peabody’s director of treasury and corporate finance, said: “Peabody has made great strides over the last 12 months in assessing our environmental performance and setting out a strategy to improve on a range of sustainable criteria. “Aligning our social purpose and sustainability strategy with our funding costs for the future makes good business sense, and we are delighted that we can continue and extend our strong relationship with NatWest through this agreement.” NatWest’s loan is part of the bank’s commitment to provide £3bn to housing associations by the end of 2022. Hedley Hatfield, director of housing finance at NatWest, added: “Having two separate objectives is something we are starting to see more of in the social housing sector, ensuring that any benefits we can pass on to borrowers is maximised.” To send feedback, e-mail emma.rosser@eg.co.uk or tweet @EmmaARosser or @EGPropertyNews Image © Peabody