BMO and EDC announce a partnership to offer sustainable financing options to Canadian companies

Published on: 02 May 2022
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Collaboration will result in solutions to assist medium-and large-sized Canadian businesses in carbon-intensive industries in transitioning to more sustainable business models. Aligned with Canada's commitment to net zero emissions by 2050, direct, indirect, and future Canadian exporters can investigate affordable capital solutions to achieve climate goals and more effectively transition to net zero emissions.

BMO Financial Group (BMO) and Export Development Canada (EDC) announced a partnership today to bring sustainable finance solutions to medium- and large-sized Canadian exporting businesses, assisting them in transitioning from carbon-intensive operations to those that can eliminate or significantly reduce emissions. BMO is the first financial institution to offer EDC's new Sustainable Financing Guarantee (the Guarantee), a product available through EDC's Sustainable Financing Program - a key source of funding to enable the support that Canadian businesses will require.

"As part of our Purpose to Boldly Grow the Good in Business and Life,"

said Jonathan Hackett, Head, Sustainable Finance and Co-Head, Energy Transition Group, BMO Financial Group,

"BMO is committed to being our clients' lead partner in their transition to a net-zero world. Assisting customers in adapting and thriving through this transition necessitates a deliberate, balanced, and expedited approach informed by science, common sense, and bold but practical solutions. The partnership with EDC is one of the innovative strategies that will assist us in meeting these critical objectives."

The Guarantee is a risk-sharing solution co-developed to increase the capacity of Canadian financial institutions, such as BMO, to provide loans and financing to companies in eligible sectors to support their carbon-reduction initiatives.

Over the next three years, the program will provide an initial $1 billion in funding to support sustainable initiatives such as hydrogen, renewable infrastructure, and grid modernization across nine carbon-intensive sectors. EDC will guarantee up to 50% of BMO's term loan - up to a maximum of US$60 million per obligor over a seven-year period - giving BMO more capacity to support their exporting clients' low-carbon transition and export growth.

"As Canada's export credit agency, we recognize the critical need to address climate change,"

said Justine Hendricks, Senior Vice President and Chief Corporate Sustainability Officer at EDC.

"By collaborating with Canada's financial institutions, such as BMO, we can help Canadian businesses gain access to the financing they require to participate in this critical transition in Canada and globally."

With EDC's commitment to achieve net zero emissions by 2050, both organizations are paving the way for businesses to innovate and achieve long-term business growth in a sustainable, equitable, and low-carbon manner.

"BMO's commitment to sustainable finance, as well as their efforts to assist Canadian businesses in adapting and remaining competitive in an ever-changing global economy, aligns with EDC's goals, making them a natural fit to launch this important initiative,"

Ms. Hendricks said.

"As we continue to build our sustainable financing stream, we look forward to collaborating with other financial institutions to assist Canadian businesses in their transition to net zero."

Clients interested in learning more about this offering should contact their BMO representative or send an email to sustainable.finance@bmo.com.

BMO is dedicated to a more sustainable future. Since 2010, BMO has been carbon neutral in its own operations. In 2021, BMO announced its Climate Ambition, which includes a commitment to deploy $300 billion in sustainable lending and underwriting to companies pursuing sustainable outcomes by 2025. BMO is committed to being its clients' lead partner in the transition to a net-zero world, and has completed green and sustainability-linked loans for companies in a variety of sectors, with targets including sustainability, diversity, and health and safety, since December 2019. BMO established a dedicated Energy Transition Group and the BMO Climate Institute in 2021 to support clients' pursuit of opportunities driven by the increasing momentum of the global economy's shift in energy production and consumption.

The Wall Street Journal's 100 Most Sustainably Managed Companies in the World, Corporate Knights' Global 100 Most Sustainable Corporations, Dow Jones Sustainability World Index, and Ethisphere Institute's list of the World's Most Ethical Companies have all recognized BMO's leadership in sustainability.

Please see the bank's Sustainability Report for more information on BMO's commitment to a sustainable future. Click here to learn more about BMO's sustainable finance. Visit BMO's Climate page to learn more about its climate goals.

EDC believes that sustainable practices are critical to the success of Canadian businesses as well as the country's international competitiveness and prosperity.

This journey began more than two decades ago, when the company first developed internal non-credit risk management practices. Since then, they've grown to be one of Canada's largest cleantech financiers, the first Canadian financial institution to issue a green bond, and the first export credit agency to commit to net zero emissions by 2050.

Today, they are making tangible progress toward their net zero goal, as well as serving as a convener and partner to the many stakeholders who will be required to make net zero a reality for Canada and Canadian businesses.

Source: BMO newsroom

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