Canadian banks are loaning Enbridge over US$1 billion

Canada’s biggest lenders are throwing their weight behind Enbridge through a new deal that will see over US$1.5 billion in loans pumped into various oil and gas pipeline expansion projects.

However, the vast majority of that fund is listed as going towards “sustainability linked” projects in the term sheets.

Of the US$1.5 billion Enbridge is getting from these lenders, US$1.1 billion is “sustainability linked.” 

That clause implies that the interest rate may reduce or increase depending on how compliant the firm is to its environmental, social, and corporate governance (ESG) goals.

The goals set currently include cutting greenhouse gas emission intensity by up to 35% by 2030 compared to its 2018 emissions. There are also various targets aimed at increasing racial diversity among its staff and female representation on its board of directors.

The remaining US$400 million is not affected by this clause and so is not subject to the same terms that apply in that case.

The financial institutions providing the financing, through their various investment arms, include RBC, BMO, TD, CIBC, Scotiabank, National Bank of Canada, Dejardins, HSBC, and ATB Financial, as well as Merrill Lynch Canada, a subsidiary of Bank of America. 

The specific breakdown of each firm’s contributions has not been made available at this time.