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(AUSTRALIA) JUST IN: National Australia Bank has agreed to finance the world’s largest coal export terminal so long as it meets a new set of social and environmental goals #AceNewsDesk report

#AceNewsReport – May.11: The conditions require the port to reduce Scope 1 and 2 emissions, which are emissions from port operations and consumed electricity:

NAB’s Port of Newcastle funding tied to green sustainability goals: & they have stepped in with “sustainability linked” loans to the value of $565 million: Last year ANZ withdrew its funding for the Port of Newcastle under its emissions action plan and over fears that the port could become a financial liability as the world moves away from fossil fuels:

Posted 7h ago

A large ship leaving a port.
NAB has stepped in to offer a landmark financing deal to the Port of Newcastle.(ABC Newcastle: Anthony Scully)

It will also be required to screen suppliers for instances of modern slavery and demonstrate engagement with operators where a medium or high risk is found.

A reclaimer places coal in stockpiles at a coal port.
NAB says there will be significant financial advantages on offer if its conditions are met.(Reuters: Daniel Munoz)

‘Behaviour-based lending’

NAB group executive David Gall said the landmark loan agreement set conditions to incentivise the port by offering a lower margin on debt if set targets were met.

“Behaviour-based lending provides an opportunity to help our customers create greater environmental and social impact in sectors not easily diversified,” he said.

Other conditions include establishing an Indigenous internship program, boosting mental health support and achieving certified recognition against the NSW government’s Sustainability Advantage Scheme.

A freight ship is loaded with coal at a port.
Green groups have welcomed the deal, saying the financial sector can be a powerful agent for change.(ABC Newcastle: Anthony Scully)

Green groups, including the Hunter Community Environment Centre and Lock the Gate, have welcomed the refinancing deal for linking the flow of money with sustainability goals.

“This is absolutely a step in the direction that Australia needs to take,” Lock the Gate’s Georgina Woods said.

“The finance industry and major financial institutions need to ensure that the public interest is clearly linked to their lending activities.

“We can’t afford to continue lending money and investing in activities that are depleting the public interest and leaving a dangerous future for our children.”

An aerial view of a large ship leaving port.
The emissions from exported coal are not included in the deal.(ABC Newcastle: Anthony Scully)

Funds to diversify

Scope 3 emissions, which would include the emissions from burning the 160m tonnes of coal exported through the port last year, are not included in the agreement.

But up to $50m in new “green lending” has been earmarked to fund green building projects and to diversify the port’s revenue base away from coal.

The port has previously acknowledged the long term outlook for coal is an existential threat to its operations and the Hunter region’s economy.

It has been strongly pushing for the NSW government to remove impediments preventing it from developing a deep-water container terminal to allow it to shift into the freight sector.

The prospect of Newcastle becoming a export hub for hydrogen energy is also an option in its long-term plan.

Port of Newcastle chief executive Craig Carmody said NAB was helping the facility through financial innovation.

“This will in turn help create a more diverse and sustainable port in the future, supporting opportunities for jobs and economic growth in the Hunter region,” he said.

The Port of Newcastle said it supported 9,000 full-time equivalent jobs nationally.

The sustainability-linked loan was part of a broader $666m refinancing facility for Port of Newcastle funded by a consortium of lenders.

#AceNewsDesk report ……Published: May.11: 2021:

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