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FortisBC puts its money on sustainability through sustainability linked loan
Jan 13, 2023
Transaction marks Canadian firsts for environmental and Indigenous linked targets
Surrey, B.C.— January 13, 2023: In continuing to align its business to sustainability principles, FortisBC Energy Inc. (FortisBC) has incorporated sustainability-linked performance targets to establish a market-leading Sustainability-linked Credit Facility (“SLL Credit Facility”). Establishing an SLL Credit Facility enables fees to be adjusted based upon FortisBC’s performance in two sustainability-related areas.
“Sustainability is in everything we do at FortisBC and that includes the financial side of the business. We were the first Canadian natural gas provider to issue Green Bonds in 2020 and we’re continuing to lead the pack in melding sustainability objectives with finance through this SLL Credit Facility,” said Ian Lorimer, vice president, finance and chief financial officer, FortisBC.
The SLL Credit Facility is tied to two sustainability performance targets (“SPTs”) related to key strategic areas to further FortisBC’s vision of creating a more environmentally and socially sustainable energy future, and incorporates incentive pricing terms, namely:
- Annual greenhouse gas (GHG) emissions reduced through renewable and low carbon gas1 displacing conventional natural gas volumes, lowering customers’ GHG emissions, and
- Increased focus on projects with meaningful and equitable Indigenous participation.
Increasing renewable and low carbon gas supply is a cornerstone of FortisBC’s Clean Growth Pathway; its vision of how to advance a lower-carbon future for the province and help meet the climate goals of the provincial government’s CleanBC plan in a balanced and attainable way. Increasing opportunities for Indigenous peoples aligns with FortisBC’s Statement of Indigenous Principles and its commitment to Reconciliation. Making tangible progress in these areas will provide FortisBC with favourable pricing adjustments on their credit facility.
This transaction marks the first time that a Canadian utility that provides natural gas has incorporated a scope three, or customer, emissions target into its SLL Credit Facility and the first time that an Indigenous SPT has been set on a project basis in Canada. CIBC acted as Administrative Agent, Sole Bookrunner, Sole Lead Arranger and Sole Sustainability Structuring Agent on this transaction.
1 FortisBC uses the term renewable and low carbon gas to refer collectively to the low carbon and carbon neutral gases or fuels that the utility can acquire under the Greenhouse Gas Reduction (Clean Energy) Regulation, which are: Renewable Natural Gas (RNG or biomethane), hydrogen, synthesis gas (from wood waste) and lignin. Depending on their source, all of these gases have differing levels of lifecycle carbon intensity. All gases would meet the proposed B.C. carbon intensity threshold for low-carbon gases of 36.4 g CO2e per megajoule set out in the 2021 B.C. Hydrogen Strategy.
About FortisBC Energy Inc.
FortisBC Energy Inc. is a regulated utility focused on providing safe and reliable energy, including natural gas, Renewable Natural Gas and propane. FortisBC Energy Inc. employs around 2,078 British Columbians and serves approximately 1,064,800 customers across British Columbia. FortisBC Energy Inc. owns and operates approximately 50,493 kilometres of gas transmission and distribution pipelines. FortisBC Energy Inc. is a subsidiary of Fortis Inc., a leader in the North American regulated electric and gas utility industry. FortisBC Energy Inc. uses the FortisBC name and logo under license from Fortis Inc. For further information on FortisBC, visit www.fortisbc.com. For further information on Fortis Inc., visit www.fortisinc.com.