LGFA is pleased to announce the launch of LGFA’s Sustainable Water Action Loan (SWALe) Lending Programme.
The SWALe Lending Programme has been established to expand our sustainable finance offerings for Water CCO Borrowers that are being formed as part of the broader water-sector reforms.
“In this time of change, Water CCO’s have the opportunity to build the sectors history of protecting the natural environment into the future, through their establishment and water service strategies. SWALe KPIs are a perfect opportunity to champion sustainability and access competitive financing arrangements, whilst being aligned to Local Water Done Well requirements. For the sector, the SWALe Lending Programme gives clear guidance on material issues and a framework to enable real progress.
This programme may just provide the biggest opportunity for real, positive, sustainable change that the New Zealand water sector has seen in recent history.” Chris Thurston, Director, Little Brown Duck Sustainability Advisory and LGFA Sustainability Committee Member.
Each SWALe is a Sustainability-Linked Loan. SWALes are target-based incentive lending structures, designed to incentivise Borrowers to improve their contribution towards Planetary Boundaries.
To qualify to apply for a SWALe, Borrowers must commit to adopting and achieving targets using a science-based approach in line with the Planetary Boundaries.
Borrowers who enter into a SWALe must report against and meet two KPIs: a compulsory Nitrogen & Phosphorus KPI, and any one of three optional KPIs relating to Biogenic GHG Emissions, Embodied Carbon, or Water Efficiency.
The Planetary Boundaries are a scientific framework that defines a “safe operating space for humanity”. This framework sets out the critical global environmental limits within which we need to stay to avoid irreversible and catastrophic environmental change.
LGFA worked with the Planetary Accounting Network to calibrate the SWALe Key Performance Indicators (KPIs) and associated targets. A report summarising how the KPIs and associated targets were developed can be found here
“As far as we are aware, the SWALe is the first lending product underpinned by Planetary Boundaries science globally. We were delighted to support this project using Planetary Accounting - an internationally recognised framework that translates the Planetary Boundaries - the gold standard for environmental sustainability - into practical action.
This is an exceptional demonstration of leadership by LGFA that will add immense value to the water sector as Water CCO's are established - by providing lending criteria that is scientifically robust, ambitious, and critically - of high materiality to the sector.” Dr Kate Meyer, Founder and CEO, Planetary Accounting Network.
The SWALe Criteria was developed with assistance from Westpac New Zealand Limited.
Sustainable Fitch was engaged to assess the SWALe Lending Programme against the Sustainability-Linked Loan Principles. This assessment can be found here
SWALes will be available to all Water CCO Borrowers, including those who may, or may not, have eligible projects to access Green and Social loans with.
You can find the SWALe Lending Programme Criteria and Application Form here
If you have any questions about the Criteria or how you can apply as a SWALe borrower, please contact Nick Howell at nick.howell@lgfa.co.nz (021 227 3738) or Helen Mahoney at helen.mahoney@lgfa.co.nz (021 220 2015).
