Australia’s Port of Newcastle has signed a A$515 million ($398 million) loan with National Australia Bank (NAB) that links interest payments to non-mandatory social and environmental targets, the companies said.
The world’s largest coal port will pay less if certain targets are met, including reducing its direct and indirect greenhouse gas emissions and screening all customers for modern slavery risks, they said in a joint statement.
The loan also contains metrics focused on mental health first aid, diversity and inclusion, they said.
The interest rate and potential discounts on it were not disclosed.
“Behaviour-based lending provides an opportunity to help our customers create greater environmental and social impact in sectors not easily diversified,” said David Gall, corporate & institutional banking group executive at NAB.
The new sustainability-linked loan is part of a broader A$666 million refinancing facility funded by a consortium of lenders, the statement said.
The new financing comes after NAB rival Australia and New Zealand Banking Group in November declined to refinance debt to the coal terminal, as it moves to achieve its own goal of stopping all lending to thermal coal companies by 2030.
Macquarie Group-backed The Infrastructure Group and Hong Kong-listed China Merchants Port Holdings own a long-term lease to the Port of Newcastle.
It exports coal around the world, including to China, India and Mexico.
The port is trying to improve its environmental, social and governance credentials and is striving to diversify its cargoes to trade in wheat, fertilisers, cement and general cargo, according to its website.
($1 = 1.2928 Australian dollars)
(By Paulina Duran; Editing by Jason Neely)