EQT has launched a credit facility of up to €5bn, aimed at providing favourable financing terms to its infrastructure portfolio companies that meet certain environmental, social and governance (ESG) targets.

The Stockholm-headquartered fund manager, in partnership with a group of global financial institutions, has set up the ESG-linked Subscription Credit Facility (SCF), currently, at €2.7bn and could be increased to up to €5bn.

The SCF has been created to inspire and incentivise infrastructure portfolio companies to improve their performance in the areas of gender equality on the board of directors and renewable energy transition, supported by a fundamental sustainability governance platform, EQT said.

“The aggregated results from the portfolio companies’ ESG efforts will be compared with pre-set KPI targets and eventually impact the ESG-bridge facility’s interest rate.

“In other words, the more ESG progress the portfolio companies demonstrate, the better the financing terms the fund will receive,” EQT said.

Lennart Blecher, deputy managing partner and head of EQT’s real assets arm, said EQT is continuously exploring new opportunities which can accelerate progress within the environmental, social and governance areas.

“A bridge facility is an excellent way of rewarding and encouraging the portfolio companies’ advancement in ESG-related areas, and by accelerating their progress we make a very tangible impact.

“At the same time, we are aligning interests of value-driven investors and financial institutions, joining forces in partnership to drive real change and scale our positive impact.”

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