In China’s technology industry, Ant Group Co. has completed the first sustainability-related credit deal.
According to the release, a Chinese fintech startup spun out from Alibaba Group Holding Ltd. has arranged a sustainability-related revolving credit facility with French bank BNP Paribas SA.
Similar loans are growing rapidly across Asia
Interest rates for sustainability-linked loans (SLLs) vary based on whether companies can satisfy specified environmental standards.
Although China claims to be one of the world’s leading issuers of green bonds, Chinese enterprises’ sustainability-related loans are increasing at a slower rate than their regional equivalents.
According to Bloomberg, the largest markets for SLL in 2021 were Australia and Singapore.
The Ant Sustainability Credit Line will be evaluated annually against renewable energy targets and the percentage of revenue donated to environmental projects, with the interest rate on the loan being decreased if the targets are satisfied.