Infrastructure financing platform Clifford Capital and sustainable infrastructure debt financing platform Pentagreen Capital established by HSBC and Temasek have announced a joint green loan collaboration of US$30 million ($40.5 million) with BE C&I Solutions (BECIS).
The parties seek to catalyse the construction of distributed sustainable bioenergy projects across Southeast Asia and India.
The borrowing entity is BECIS subsidiary BECIS Bioenergy, an energy-as-a-service solutions provider in Asia.
The loan will finance 14 individual decentralised installations across Indonesia, Thailand, Cambodia, the Philippines and India. The projects convert agricultural waste and other sustainably sourced feedstock into renewable steam, which is delivered to industrial customers under offtake agreements and are expected to result in 114,404 tons of CO2 emissions avoided annually.
The installations are located at industrial and manufacturing sites operated by established local and multinational companies across industries, including food and beverage, consumer goods, construction materials and agricultural products.
Clifford Capital and Pentagreen are providing a US$30 million Secured Green Loan Facility on a 50:50 basis. As the structuring arranger, Clifford Capital together with Pentagreen Capital as the green loan coordinator, arranged an innovative dual-tranche structure where Pentagreen’s tranche is subordinated to the commercial tranche provided by Clifford Capital, and has a differentiated repayment profile.
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The combined solution unlocks the full required financing package for the borrower, catalysing growth in energy efficiency and sustainability activities in the region.
In anticipation of future growth, the financing comes with an accordion feature to allow the facility size to be increased to US$50 million. The committed US$30 million has the potential to unlock US$60 million in project value.
The financing has been structured as a Green Loan under BECIS’ Green Loan Framework, which is aligned with the Green Loan Principles 2023, administered by the Asia Pacific Loan Market Association and Loan Syndications and Trading Association. A Second Party Opinion has been issued by Sustainalytics.
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Industrial processes, agriculture and energy contributed to more than 72% of greenhouse gas emissions in Southeast Asia, highlighting the acute need to channel capital towards innovative industrial decarbonisation solutions, says Pentagreen CEO Marat Zapparov.
“This transaction demonstrates the power of partnership between different types of financiers acting together to make a deal happen and crowd-in capital to an innovative business model in emerging Asia,” he adds.
