CBA helps refinance Sydney Light Rail project with NSW’s first operational PPP Green Loan

Commonwealth Bank has played a leading role in arranging New South Wales’ first green loan for an operational ‘Public-Private Partnership’ (“PPP”), helping the Sydney Light Rail project refinance its almost $700 million debt facilities.

The project, which is estimated to reduce greenhouse gas emissions by 663,000 tonnes over a 30 year period, is being delivered by a Public-Private Partnership between Transport for New South Wales and the ALTRAC consortium.

The transaction marks an important milestone for NSW, as this is the first time that an operational NSW PPP has been issued with a green loan. Commonwealth Bank acted as green loan coordinator on the transaction and provided 50 per cent of the funding for the almost $700 million loan. CBA was also appointed to the role of ‘Mandated Lead Arranger, Underwriter and Bookrunner’ (“MLAUB”).

‘Green loan’ labels apply to projects that meet certain sustainable management criteria, such as renewable energy use, energy efficiency, clean transportation, pollution control, and climate change adaptation. Sydney Light Rail notably benefits from energy saving technology which will allow the trams to recover more than 99 per cent of the energy usually lost during their braking mode. The project’s green loan status has been certified by the ‘Climate Bonds Standard Board‘, an independent body that verifies the conformance of loans and bonds to the rigorous ‘Climate Bonds Standard’.

CBA Group Executive Institutional Banking & Markets Andrew Hinchliff said: “the bank is working closely with both the public and private sectors to help build Australia’s future infrastructure.”

“Smarter cities with more efficient public transport are key to transitioning Australia to a more sustainable future,” Mr Hinchliff said.

“We are seeing a rapid acceleration in demand for financial solutions that support sustainable projects, and the green loan we have been able to arrange for the Sydney Light Rail Project is the latest example. This project is forecast to deliver a marked reduction in greenhouse gas emissions over the coming years, and we are delighted to be able to help the NSW Government in its pursuit of reduced emissions targets.”