Capital shift: Macquarie Group raise $888m for green energy projects

Australian banking and financial services giant Macquarie Group has raised £500 million ($A889 million) in bonds to finance green projects such as renewable energy projects, energy efficiency, and clean transportation.

Macquarie Group announced the move on Wednesday as part of its “longstanding commitment to green energy and technology as a fund manager, adviser, financier, participant in environment markets, and investor alongside clients.”

Macquarie’s biggest involvement in the green energy sphere was its acquisition of the UK’s Green Investment Bank (GIB) in for £2.3 billion in early 2017, although it has been an investor in wind and solar projects in Europe and the Americas, and is looking at offshore wind opportunities in Asia.

The Green Bank move raised concerns later that year when a report by the UK’s National Audit Office which raised concerns that the acquisition process did not set in place a long-term commitment from Macquarie to continue the GIB’s green financing operations beyond the first three years.

The concern might be overexaggerated, considering the words in August of 2017 of Daniel Wong, Head of Macquarie Capital Europe:

“Combined with Macquarie’s resources as the world’s largest infrastructure investor, the Green Investment Group will be uniquely placed to continue in its pioneering role in the world’s transition to a low-carbon economy.

We look forward to growing the Green Investment Group’s capacity and its contribution to the UK and global renewables markets.”

Macquarie Group is also involved in several offshore wind projects, including the recently opened 573 MW Race Bank Offshore Wind Farm in the UK, and the recently confirmed 120 MW Formosa 1 offshore wind farm in Taiwan, an expansion of the project’s first 8 MW phase, and the country’s first offshore wind farm.

Wednesday’s £500 million green loan facility, part of an overall facility of £2 billion, appears then as less of a surprise and more a continued commitment to the bank’s green ambitions.

Specifically, Macquarie Group will split the £500 million into two tranches, a three-year revolving tranche and a five-year term tranche, from which the proceeds will contribute to eligible green projects that provide “clear green benefits,” said Macquarie.

“This transaction further demonstrates the leading global role Macquarie is playing in the growth of green finance and the development of new renewables capacity,” explained Alex Harvey, Macquarie’s Chief Financial Officer.

“The future utilisation of our Green Investment Group’s market-leading Green Impact Assessment approach is another example of the value delivered by our acquisition of GIG in 2017.”

Macquarie declared that the issuance was the first from a financial institution globally, and the first from an Australian company, to issue such a green loan under APLMA Green Loan Principles, and that the loan “saw strong demand from global financial institutions, with notable interest in Asia.”

The Hongkong and Shanghai Banking Corporation Limited, Sydney Branch (HSBC) and ING Bank N.V. (ING), acted as Green Structuring Advisors on the transaction. HSBC coordinated the syndication of the Facility as a joint Bookrunner with ING and Bank of China Ltd.

The remainder of the £2.0 billion will be used for “General corporate” projects.