DEME has transformed all its long-term loans into sustainability-linked borrowing, representing a total value of €579m.
The commercial terms of loans with the group’s relationship banks will now be directly linked to the performance of DEME with regard to sustainability in two specific areas: work safety and low carbon fuel.
Key performance indicators (KPIs) will trigger adjustments on the interest margins applied to the loans.
By changing existing borrowing into sustainability-linked loans, the lenders agree to lower the interest rate when the company achieves its targets in relation to the two sustainability KPIs.
Failure to achieve both targets will result in a slight increase of the interest rate.
DEME head of structured finance and treasury Geert Wouters said: “The DEME Group is again a pioneer.
“We are proud to be the first company in our industry to introduce these important sustainability targets in all of our long-term financing agreements.
“In a strong signal to our stakeholders, we have demonstrated that we are considering our sustainability goals throughout our business, supporting this with concrete action.
“This is a bold step, and it shows that we are willing to accept the related financial consequences.”
KBC Bank NV senior general manager for corporate banking and facility management Wim Eraly added: “KBC is proud to have been selected by DEME as sustainability coordinator to assist them with the incorporation of the sustainability features in their long-term bank financing.
“We build on our existing knowledge and experience to structure and coordinate this sustainability-linked financing, guiding DEME in the selection of the sustainability key performance indicators and the target setting ensuring material and challenging targets for DEME.
“The transaction clearly illustrates KBC’s expertise in advising its clients with sustainable finance solutions to support their transition to a greener future.”