HeidelbergCement link financing to climate targets
Company links credit lines to the sector’s most ambitious climate targets for the first time
HEIDELBERGCEMENT have concluded a new syndicated credit line that, for the first time, takes into account sustainability objectives in accordance with the Sustainability-Linked Loan Principles (SLLP) of the Loan Market Association. Replacing the company’s existing revolving credit line, the new credit facility has a term of five years with two one-year extension options.
The voluntary SLLP link credit lines to sustainability criteria, which are measured via defined key performance indicators (KPIs). The credit margin is based on the achievement of HeidelbergCement’s climate targets and will be adjusted depending on the CO2 emissions per tonne of cementitious material and the alternative fuel rate.
‘With the conclusion of the new syndicated credit line, we have taken the first step towards sustainable financing. In addition, we were able to improve the terms and conditions compared with the previous credit line,’ explained René Aldach (pictured), chief financial officer of HeidelbergCement. ‘We want to increase the proportion of sustainable financial instruments to over 70% by 2030.’
HeidelbergCement say their solid financial base enabled them to reduce the syndicated credit line from €3 billion to €2 billion and to avoid financial covenants. The credit line serves as a liquidity reserve and can be used for cash drawdowns as well as for letters of credit and guarantees in euro and other currencies.