Emerging markets-focused private equity firm Actis has secured an impact-linked revolving subscription credit facility for its new energy fund that exceeded target to raise $4.7 billion last October.
The fund, Actis Energy 5, will target energy transition investments worldwide.
“This new credit facility represents the latest in the evolution of sustainability-linked financing, charting a new course when it comes to financing private market investments in the energy sector,” said Shami Nissan, Head of Sustainability at Actis.
Actis said the new facility features a hybrid format and combines eligibility criteria for projects that can be funded by the facility with a margin adjustment mechanism that incentivises impact outcomes.
This hybrid format facility seeks to overcome the limitations of existing impact-linked structures, by incentivising that loan proceeds are directed to projects that will deliver social and environmental improvement, and that these can be objectively and continually measured for the magnitude of their impact.
By focusing on measurable impact outcomes, Actis and the facility’s two sustainability coordinators, Citi and Standard Chartered, hope to catalyse widespread adoption of this new hybrid format in other financing structures, which seeks to help deliver positive social and environmental outcomes across private markets.
The facility includes a revolving subscription credit facility of up to $1.2 billion to be used to finance investments.
Citi and Standard Chartered acted as lead arrangers and joint sustainability coordinators and were joined by four banks to complete the syndicate.