Port chiefs in Newcastle, Australia, have agreed a A$515 million loan with National Australia Bank (NAB) that links interest payments to emissions targets.
The world's largest coal port will pay less if certain ‘non-mandatory social and environmental’ targets are met, including reducing its direct and indirect greenhouse gas emissions and screening all customers for modern slavery risks.
The loan also contains metrics focused on mental health first aid, diversity and inclusion. The interest rate and potential discounts on it were not disclosed.
"Behaviour-based lending provides an opportunity to help our customers create greater environmental and social impact in sectors not easily diversified," said David Gall, corporate and institutional banking group executive at NAB.
The new sustainability-linked loan is part of a broader A$666 million refinancing facility funded by a consortium of lenders, the statement said.
The new financing comes after NAB rival Australia and New Zealand Banking Group declined to refinance debt to the coal terminal in November, as it moves to achieve its own goal of stopping all lending to thermal coal companies by 2030.
Macquarie Group-backed The Infrastructure Group and Hong Kong-listed China Merchants Port Holdings own a long-term lease to the Port of Newcastle. It exports coal all around the world, including to China, India and Mexico.
The port is trying to improve its environmental, social and governance credentials and is striving to diversify its cargoes to trade in wheat, fertilisers, cement and general cargo, according to its website.
- Reporting by Reuters