Commonwealth Bank and ANZ have partnered with Celsus to coordinate the $2.2 billion refinancing of the Royal Adelaide Hospital by issuing Australia’s first sustainability loan and the largest in the healthcare sector globally.
Celsus - the consortium that manages the hospital - said the hospital's eligibility for the green loan was based on its green buildings; it was the first large scale hospital in Australia to achieve a 4 Star Green Star - Healthcare As Built rating - from the Green Building Council of Australia.
The hospital was eligible for a social loan because it is South Australia’s largest accredited teaching hospital and the state’s largest hospital delivering essential complex medical care.
Both loans were structured in line with international sustainable finance principles.
Andrew Hinchliff, head of CBA's institutional banking & markets business said: “The combination of both green and social elements in a single sustainability loan shows that the same project can advance Australia toward a more sustainable economy and a more inclusive society and is a testament to the ambition and commitment of Celsus."
“This transaction’s unique combination of factors marks an important milestone in the development of both Australia’s and the world’s market for sustainable finance.”
Celsus chief executive Di Mantell said the innovative financing structure enabled Celsus to highlight its commitment to both social and environmental benefits to its shareholders and the South Australian community.
“The lending market is going through a large shift in which preferences for lending are moving toward borrowers with strong ESG credentials," she said.
“This has accelerated since the beginning of 2021 and is now showing in competitive pricing and volume results for borrowers that can align with ESG related frameworks such as the Green and Social Loan Principles.”
Mantell said the Royal Adelaide Hospital was designed and constructed to minimise the impact on the environment.
New international principles
The issuing of social loans is a recent market development, with the principles backed for the first time in April 2021 by the Asia Pacific Loan Market Association
The hospital deal is one of several transactions which have executed a loan facility aligned to these principles since, and one of the first globally to align to both the Green Loan Principles and the Social Loan Principles as a sustainability loan.
It comes just weeks after Westpac NZ signed Australasia’s first social loan in alignment with these international sustainable finance principles.
The $125 million social loan will enable Te Pūkenga - formerly NZ Institute of Skills and Technology - to offer better learning and employment opportunities to thousands of New Zealanders. Te Pūkenga was formed in 2020 when the government brought together New Zealand’s 16 Institutes of Technology and Polytechnics under one umbrella.