Fortescue secures yuan loan worth $2 billion for green energy plans

Australia’s Fortescue said on Friday it had secured a yuan-denominated loan worth 14.2 billion Chinese yuan ($1.98 billion) to ramp up its decarbonization plans, weeks after scrapping its US and Australian green hydrogen projects.

The loan agreement comes as the world’s fourth-largest iron ore miner reshapes its clean energy portfolio as the United States scales back its priorities on green energy under the Trump administration.

Fortescue announced plans in July to wind up its green hydrogen projects in Arizona, US, and Queensland in Australia, a week after its billionaire founder and chairman, Andrew Forrest, visited China with Australian Prime Minister Anthony Albanese.

On Friday, Forrest, popularly known as Twiggy, lauded China’s industrial scale, innovation, and commitment to investing in green technology, while underscoring his deepening ties with Chinese institutions.

“As the United States steps back from investing in what will be the world’s greatest industry, China and Fortescue are advancing the green technology needed to lead the global green industrial revolution,” Forrest said in a statement.

This financing agreement strengthens Fortescue’s long-standing partnerships with Chinese institutions and opens new frontiers for collaboration, Forrest said.

The five-year syndicated term-loan facility with a 3.8% per annum fixed interest rate is backed by leading Chinese, Australian and international lenders, including Bank of China and ICBC.

The facility is the first of its kind for an Australian company where the use of proceeds is not restricted, a Fortescue spokesperson told Reuters in an emailed response.

Fortescue plans to use the facility for general corporate purposes and its decarbonization plans, the company said.

($1 = 7.1810 Chinese yuan)

(By John Biju, Rishav Chatterjee and Sameer Manekar; Editing by Alan Barona and Subhranshu Sahu)