Wales & West Utilities has signed a £125m sustainability linked committed credit facility with four relationship banks, the first sustainability linked revolving credit facility in the gas distribution sector.
This transaction replaces an existing £125m facility with the same banks. Lloyds Bank acted as Sustainability Coordinator for the transaction. The ESG linking means that the new facility will have contractually embedded 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 gas like hydrogen and biomethane
An average of less 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 support the delivery of Wales & West Utilities’ 2021-2026 business plan by contributing to liquidity resources during this period of significant investment. The company’s most ambitious plan ever, it will see the company invest, subject to appropriate funding under future regulatory settlements, £400m 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 Utilities team as it works to meet its ambitions.”
Wales & West Utilities is the company that looks after the pipes that keep the gas flowing to heat the homes and power the businesses of 7.5m people across Wales and south west England. They operate the gas emergency service, connect new homes and businesses, and upgrade the gas network so it is safe today and fit for the future.
The company is also committed to playing its part in getting to Net Zero carbon emissions by 2050. It has 46 power stations connected to its network, which support renewables like wind and solar power, while 20 green gas sites inject enough decarbonised green gas to power approximately 180,000 homes, Additionally, the company’s network supplies bus garages in three locations across the south west of England, fuelling CNG buses that improve air quality and reduce carbon emissions from public transport.
