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20/07/2023
SSEN Distribution Signs First-Ever Sustainability-Linked Revolving Credit Facility
Scottish and Southern Electricity Networks (SSEN) Distribution has announced that it has signed its first ever sustainability-linked Revolving Credit Facility (RCF).
The RCF further reinforces SSEN Distribution's commitment to sustainability in line with its Environmental Action Plan and broader sustainability ambitions including serving public interest and inclusive service provision.
The facility, which was originally signed in November 2022, has been upgraded to include three key performance indicators, which are aligned with SSEN Distribution's Sustainability Strategy, and each indicator will be assessed annually during the term of the loan, thus bringing greater alignment between SSEN Distribution's sustainability and financing strategies.
The ESG KPIs relate to the following areas:
1. Reduction in Scope 1 and 2 emissions;
2. Suppliers setting science-based emission reduction targets; and
3. Supporting customers in vulnerable situations.
SSEN Distribution is committed to supporting climate action and is proud to be the first UK Distribution Network Operator to set accredited science-based targets in line with a 1.5°C pathway and is committed to a 35% reduction in Scope 1 and 2 emissions by 2028 and a 55% reduction by 2033.
A 'social' KPI is also included in the facility, empowering SSEN to drive forward provision of this service for the Priority Service Register, which provides additional assistance to customers in vulnerable situations across SSEN Distribution's licence areas.
The company has an enduring commitment to making a positive impact on the society and the communities it services, and this further commitment to sustainable initiatives and securing this sustainability-linked loan is the latest example of ongoing efforts to act responsibly.
SSEN Distribution's Senior Consents and Environment Manager, Michaela Payne, said: "We are proud to take this next step to building a sustainable future for our stakeholders by aligning our business goals and bringing our investors with us on this journey to achieve our environmental, social and governance performance targets.
"We have an ambitious Environmental Action Plan outlining our plan to accelerate progress towards net zero over the RIIO-ED2 price control, and aim to lead by example by reducing our own environmental impact in a transparent, credible way."
SSEN Distribution's Managing Director, Chris Burchell, said: "Our five-year RIIO-ED2 business plan reconciles the need for distribution network investment to power communities to net zero, whilst ensuring efficiency and affordability for all as we invest over £3.5bn over the next five years.
"Securing sustainable finance, such as this revolving credit facility, enables us to retain our clear focus on reliability and customer service whilst we accelerate to net zero and protect those most vulnerable.
"I would like to extend my thanks to MUFG and everyone involved in progressing our first sustainability-linked RCF and paving the way to powering communities to net zero."
MUFG acted as sole Sustainability Coordinator in the structuring of this RCF agreement.
Fabianna Del Canto, Co-Head of MUFG EMEA Capital Markets said: "MUFG EMEA are proud to have worked with the SSEN team on its inaugural sustainability-linked facility for the Distribution business, which saw strong support from the lender group. The sustainability-linked structure further reinforces SSEN Distribution's commitment to its ESG strategy with the inclusion of three ESG KPIs and associated performance targets relating to carbon reductions as well as a 'social' KPI linked to assisting vulnerable customers."
The RCF further reinforces SSEN Distribution's commitment to sustainability in line with its Environmental Action Plan and broader sustainability ambitions including serving public interest and inclusive service provision.
The facility, which was originally signed in November 2022, has been upgraded to include three key performance indicators, which are aligned with SSEN Distribution's Sustainability Strategy, and each indicator will be assessed annually during the term of the loan, thus bringing greater alignment between SSEN Distribution's sustainability and financing strategies.
The ESG KPIs relate to the following areas:
1. Reduction in Scope 1 and 2 emissions;
2. Suppliers setting science-based emission reduction targets; and
3. Supporting customers in vulnerable situations.
SSEN Distribution is committed to supporting climate action and is proud to be the first UK Distribution Network Operator to set accredited science-based targets in line with a 1.5°C pathway and is committed to a 35% reduction in Scope 1 and 2 emissions by 2028 and a 55% reduction by 2033.
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A 'social' KPI is also included in the facility, empowering SSEN to drive forward provision of this service for the Priority Service Register, which provides additional assistance to customers in vulnerable situations across SSEN Distribution's licence areas.
The company has an enduring commitment to making a positive impact on the society and the communities it services, and this further commitment to sustainable initiatives and securing this sustainability-linked loan is the latest example of ongoing efforts to act responsibly.
SSEN Distribution's Senior Consents and Environment Manager, Michaela Payne, said: "We are proud to take this next step to building a sustainable future for our stakeholders by aligning our business goals and bringing our investors with us on this journey to achieve our environmental, social and governance performance targets.
"We have an ambitious Environmental Action Plan outlining our plan to accelerate progress towards net zero over the RIIO-ED2 price control, and aim to lead by example by reducing our own environmental impact in a transparent, credible way."
SSEN Distribution's Managing Director, Chris Burchell, said: "Our five-year RIIO-ED2 business plan reconciles the need for distribution network investment to power communities to net zero, whilst ensuring efficiency and affordability for all as we invest over £3.5bn over the next five years.
"Securing sustainable finance, such as this revolving credit facility, enables us to retain our clear focus on reliability and customer service whilst we accelerate to net zero and protect those most vulnerable.
"I would like to extend my thanks to MUFG and everyone involved in progressing our first sustainability-linked RCF and paving the way to powering communities to net zero."
MUFG acted as sole Sustainability Coordinator in the structuring of this RCF agreement.
Fabianna Del Canto, Co-Head of MUFG EMEA Capital Markets said: "MUFG EMEA are proud to have worked with the SSEN team on its inaugural sustainability-linked facility for the Distribution business, which saw strong support from the lender group. The sustainability-linked structure further reinforces SSEN Distribution's commitment to its ESG strategy with the inclusion of three ESG KPIs and associated performance targets relating to carbon reductions as well as a 'social' KPI linked to assisting vulnerable customers."
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