Financing Renewable Energy: Utilizing Green and Sustainability-Linked Loans and Sustainable Bonds

Project Eligibility Criteria, Use of Proceeds, Management, Reporting, Annual Disclosures, and More

This program has been cancelled

A live 90-minute premium CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
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Wednesday, July 13, 2022 (in 13 days)

1:00pm-2:30pm EDT, 10:00am-11:30am PDT


This CLE course will provide corporate and renewable energy counsel with an in-depth analysis of utilizing green and sustainability-linked loans (SLLs) and sustainable bonds to finance renewable energy projects. The panel will discuss the key components of each financing option, project eligibility requirements, use and management of proceeds, project evaluation and selection, target setting, reporting and annual disclosures, and best practices for corporate and energy counsel, investors, and developers.

Description

The use of green loans, sustainability-linked loans, and sustainable bonds to finance renewable energy is rising. However, each has its own set of standards, use of proceeds and/or target setting requirements, and necessary regulatory obstacles for counsel to advise renewable energy and corporate clients properly.

A green loan is an instrument exclusively to finance new or existing eligible green projects. "Green project" includes renewable energy, energy efficiency, pollution prevention and control, and clean transportation projects. The core determinant for qualifying as a "green project" is that the financed project must provide clear environmental benefits. Green loans must align with applicable standards for the proceeds, project evaluation and selection, reporting, and annual disclosures.

An SLL is any loan instrument or contingent facility that incentivizes a borrower's achievement of designated sustainability performance objectives measured using applicable sustainability performance targets. Sustainability performance is measured against targets, including key performance indicators (KPIs) and ratings that measure improvements in the borrower's sustainability profile. This deviates from the use of the proceeds model implemented across green loans and requires target setting, reporting, and annual review.

Sustainable bonds, including green, sustainability, and sustainability-linked bonds (SLBs), are also available to finance renewable energy projects. Green bonds, like green loans, may be used to finance green projects. Sustainability bonds are more broadly available to finance a combination of green and social projects. In contrast, the proceeds of SLBs may be used for general corporate purposes, whereby the financial or structural characteristics vary depending on whether the issuer achieves predefined sustainability objectives.

Listen as our panel discusses key components of financing renewable energy with green loans, SLLs, sustainable bonds, and best practices for counsel, investors, and developers.

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Outline

  1. Green loans
    1. Key components and requirements
    2. Use of proceeds
  2. Sustainability-linked loans
    1. How SLLs differ from green loans
    2. Considerations for lender and borrower
  3. Sustainable bonds
    1. Green bonds
    2. Sustainability bonds
    3. SLBs
  4. Reporting and disclosures
  5. Best practices for counsel, investors, and developers

Benefits

The panel will review these and other notable issues:

  • What are the key principal elements and distinctions of green loans, SLLs, and SLBs?
  • What are the project eligibility, use of proceeds, and management requirements for use-of-proceeds loans and bonds?
  • What are the critical considerations for selecting sustainability performance targets and KPIs for SLLs and SLBs?
  • What are the reporting and annual disclosure requirements?
  • What are the considerations and risks for financiers, borrowers, and issuers?

Faculty

Gribov, Guy
Guy Gribov

Partner
Vinson & Elkins

Mr. Gribov represents clients in a wide range of financial transactions. He advises mezzanine funds, publicly and...  |  Read More

Oelman, David
David P. Oelman

Partner
Vinson & Elkins

Mr. Oelman is one of the country’s preeminent IPO practitioners, having worked on more IPOs in the last three...  |  Read More