Genesis (NZX:GNE): What is its Sustainable Finance Programme all about?

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Genesis (NZX:GNE): What is its Sustainable Finance Programme all about?

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 Genesis (NZX:GNE): What is its Sustainable Finance Programme all about?
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Highlights

  • Genesis has launched a broad Sustainable Finance Programme to support its sustainability goals.
  • The Programme includes a framework, entitling an existing NZX-listed bond (GNE030) as a Green Bond and a NZ$100-million loan.
  • GNE has set annual GHG emission targets for every year of the loan in line with its emission reduction objectives. 

Genesis Energy Limited (NZX:GNEASX:GNE) owns and operates a diverse range of generation assets in NZ, which include hydropower, wind, and thermal generation.

Genesis made an announcement on Wednesday informing that it had launched a broad Sustainable Finance Programme. This comes on the back of the Company’s commitment to climate change and sustainability.

The Sustainable Finance Framework sets out the process by which, Genesis proposes to issue and manage bonds and loans on an ongoing basis. This is done to support sustainability objectives summarised in the framework, contribute towards SDGs, and develop positive environmental and social effects.

Genesis details

Image source: © 2021 Kalkine Media, Data source- Refinitiv

The framework entitles an existing NZX-listed bond (GNE030) as a Green Bond from 3 November and a NZ$100-million loan linked to the energy company attaining its sustainability targets. These include reducing emissions, increasing renewable energy generation and a future of work programme.

RELATED READ: Genesis (NZX:GNE): What were the highlights of ASM?

GNE will pay a higher interest rate if it falls short of its commitments but will pay a lower interest rate on the loan to attain its targets.

Genesis is the first company in NZ to have a framework, loan and bond all associated with the Climate Transition Finance Handbook issued by the International Capital Markets Association.

 

Genesis’ commitment to climate change

GNE plans to allocate proceeds from the Green Bond to fund or refund projects, assets and activities that fulfil eligibility standards.

RELATED READ: Why these 5 NZX energy stocks can be considered before 2021 ends

Marc England, Chief Executive of Genesis, stated that the Company had set annual GHG emission targets for every year of the loan in line with its emission reduction targets through sustainability linked loan.

The Company’s objectives align with the Paris Agreement to limit global warming to 1.5 degree Celsius and have been proved by the internationally recognised Science-Based Targets initiative, as per Mr England.

RELATED READ: 5 NZX energy stocks helping NZ achieve 2050 carbon neutrality goal

The Company also has annual targets to deliver on its pledge to sign contracts for 2,650 GWh of new renewable energy generation to be built by December 2030, he added.

On 3 November, at the time of writing, GNE was trading at NZ$3.2, down by 0.31%.

Bottom Line

Genesis is committed to playing its part in a low-carbon future and the new Sustainable Finance Programme is important for the same.

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