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Orbit agrees £115m sustainable loan with major bank
Orbit has secured a £115m sustainability-linked loan from Barclays to fund new homebuilding and improvements to the energy efficiency of its existing housing stock.
The 46,500-home housing association said the interest margin on the revolving credit facility (RCF) will be linked to whether it hits targets on managing green spaces and on its social value programmes.
Jonathan Wallbank, finance director at Orbit, said the deal “exemplifies our rapid progression” on sustainability practices.
He also believes it “will enable us to continue building much-needed affordable homes and improving the energy efficiency of our existing homes, while delivering social value for our communities”.
The loan is Orbit’s second which is linked to sustainability criteria, after it took out a similar £100m RCF with Dutch bank ABN AMRO in April this year.
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RCFs of this type have become increasingly popular in corporate banking in recent years, and are designed to incentivise firms to improve their sustainability practices, while also improving lenders’ environmental, social and governance (ESG) scores.
Orbit’s first performance indicator will be measured against its target to manage 30% of its outdoor spaces in a way which enables nature’s recovery by 2030.
The second will measure how much ‘social value’ Orbit creates through its various social programmes and through its supply chain.
This value will be calculated using HACT’s Themes, Outcomes and Measures methodology.
Dave Cassidy, head of social housing at Barclays, said: “Helping Orbit with this significant new financing is central to our ambition to accelerate transition finance in the social housing sector.
“Of particular note is our first social housing biodiversity KPI [key performance indicator], which broadens the suite of measures within our growing sustainably linked loan portfolio and demonstrates Orbit’s desire to work across the ESG spectrum.”
Jonathan Wallbank, group finance director, said: “Sustainability is integral to Orbit’s vision to lead in building thriving communities and this new credit facility exemplifies our rapid progression in this area.
“Orbit is committed to enhancing the sustainability of its operations and communities, and we are delighted to have agreed this new facility with Barclays Corporate Banking, which will enable us to continue building much-needed affordable homes and improving the energy efficiency of our existing homes, while delivering social value for our communities.”
Earlier this week, the Pension Insurance Corporation (PIC) made its first direct equity investment in affordable housing with a £50m deal to build 125 homes, while targeting up to 1,000 homes in the long term.
The specialist insurer of defined benefit pension schemes said the new investment was part of a “long-term” partnership with London Square, the developer, and Square Roots, its for-profit subsidiary.
PIC said it was aiming to invest £500m over the next five years to build around 1,000 affordable homes.
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