Actis has secured an impact-linked revolving subscription credit facility, in excess of $1bn, for its latest energy fund.
The credit facility is for $1.2bn and is in relation to the Actis Energy 5 fund, which recently closed with $6bn of investable capital and will target energy transition investments worldwide.
The new facility represents the next generation of sustainability-linked credit financing in private markets. It features a hybrid format and is the first to combine both eligibility criteria for projects that can be funded by the facility (“use-of-proceeds format”) with a margin adjustment mechanism that incentivises impact outcomes.
These outcomes will be assessed using the Actis Impact Score (AIS) methodology (“sustainability-linked format”).
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 using the AIS.
Any drawing under the new facility will qualify for a “use of proceeds” margin benefit from the point in time that the drawdown is made, but only providing it can be demonstrated that it will be used within one or more of three measurement criteria, which include investment in an energy sector that contributes to climate change mitigation.