Construction group secures industry’s largest sustainability linked loan

Lloyds Bank and construction group, Balfour Beatty, have announced they have agreed to convert a £375 million revolving credit facility to a sustainability linked loan.

The deal represents the largest sustainability linked loan ever provided in the UK construction sector, and will see Balfour Beatty receive a credit margin reduction or increase linked to performance against agreed sustainability outcomes during the life of the financing, which matures in October 2024.

Under the terms of the loan the group will be incentivised to deliver measurable improvements in carbon emissions, social value generation and Environmental, Social and Governance rating.

Phil Harrison, Balfour Beatty Chief Financial Officer, said:

“Balfour Beatty has long been at the forefront of sustainability in the construction sector, with clear targets and ambitions as set out in the company’s Group Sustainability Strategy. We are delighted to further demonstrate our commitment with this new sustainability linked loan.

“We appreciate the support of our international bank group and the confidence this commitment reflects in Balfour Beatty.”

Max Jones, Infrastructure and Construction Director, Lloyds Bank, said:

“We’re proud to have worked with Balfour Beatty’s international bank group to fund and co-ordinate the largest sustainability linked loan in the UK construction industry.

“With the sector’s drive to becoming more sustainable, critical to the UK’s net zero ambition, this is an important development for the industry as a whole. Acting as the sole Sustainability Coordinator and the Facility Agent signals our commitment to the industry and our support for Balfour Beatty to reach its ESG goals.”

The agreement of the sustainability linked loan arrangement follows on from Balfour Beatty’s Building New Futures sustainability strategy that was refreshed in December 2020.