Wales & West Utilities Signs £125 Million Sustainability Linked Credit Facility
Wales & West Utilities has signed a £125 million sustainability-linked committed credit facility with four relationship banks, the first in the gas distribution sector.
This transaction replaces a previous £125 million facility with the same banks. Lloyds Bank served as the transaction's Sustainability Coordinator. Because of the ESG connection, the new facility will have contractually integrated performance criteria against the following key performance indicators (KPIs):
A reduction in the amount of natural gas leakage from the gas network by at least 28% by the end of 2026. Investment to deliver this will reduce carbon emissions today while preparing the gas network to transport green gases like hydrogen and biomethane.
An average of fewer than 10 hours ‘off-gas’ per property if gas supplies to homes and businesses are interrupted in an unplanned way. Wales & West Utilities will refine the targeting of their gas pipe investment programme in a way that will maximise network reliability.
Continue to improve levels of customer satisfaction by focusing on the customer experience, exploring the use of new customer self-service tools, and benchmarking performance against market leaders.
The new facility will help Wales & West Utilities succeed in its 2021-2026 business plan by providing liquidity resources throughout this period of major investment.
The company’s most ambitious plan ever, it will see the company invest, subject to appropriate funding under future regulatory settlements, £400 million to work towards delivering the ambition of a Net Zero-ready gas network by 2035, while looking after the most vulnerable people in communities across Wales and South West England.
Neil Henson, Director of Finance & IT, said:
“At Wales & West Utilities, we’re committed to delivering for the communities that we serve. Preparing the gas network to transport green gas like hydrogen and biomethane, reducing gas leakage and carbon emissions, keeping unplanned interruptions to a minimum, and continuing to improve the customer experience: this ESG-linked finance facility is the first major step we have taken to align our capital structure to our ESG ambitions.
“We’re proud to be part of the first sustainability-linked revolving credit facility in the gas distribution sector, which will support the delivery of what our customers and stakeholders want and need.”
Duncan Cole, relationship director for power and utilities at Lloyds Bank, said:
“It is important for both customers and the environment that utility companies provide safe, reliable, and efficient services. By participating in this sector-first sustainability-linked credit facility, we can support Wales & West Utilities’ work to deliver for their customers today and in the future. We look forward to continuing to collaborate with the Wales & West utility team as it works to meet its ambitions.”
Wales & West Utilities is responsible for the pipes that keep gas flowing to heat the homes and power the businesses of 7.5 million people in Wales and southwest England. They manage the gas emergency service, connect new houses and businesses, and upgrade the gas network to ensure that it is safe today and in the future.
The company is also committed to helping the world achieve net zero carbon emissions by 2050. It has 46 power stations connected to its network that support renewables such as wind and solar electricity, as well as 20 green gas installations that inject enough decarbonised green gas to power about 180,000 homes.
Furthermore, the company's network fuels CNG buses that improve air quality and cut carbon emissions from public transportation in three places across south west of England.