Celsus, has secured the world’s largest Sustainability Loan in the healthcare sector
Royal Adelaide Hospital commercial operator, Celsus, has secured the world’s largest Sustainability Loan in the healthcare sector, and the largest project finance Green/Sustainability Loan in Australia, following the completion of a major refinancing deal with banks and financiers. Following precedent established in the bond market, a Sustainability Loan is an instrument that finances green and social projects.
The landmark $2.2bn transaction involving ANZ and CBA as Sustainability Coordinators and funded by the 18 Mandated Lead Arrangers has been recognised as a Sustainability Loan due to its green and social credentials. The transaction has received a Second Party Opinion from DNV Business Assurance Australia, supporting its alignment to the internationally recognised Green Loan Principles and Social Loan Principles.
The deal is also believed to be the first Sustainability Loan in Australia and the largest healthcare Environmental Social and Governance (ESG) labelled loan in the Asia Pacific, as verified through Refinitiv and Bloomberg databases.
Royal Adelaide Hospital was the first large-scale hospital complex in Australia to achieve a 4 Star Green Star – Healthcare ‘As Built’ rating from the Green Building Council of Australia (GBCA).
The hospital’s rating is based on its sustainable design and construction as well as its operation, fit out and positive impact on staff and patients. The hospital is equipped with 700 overnight beds (including 40 mental health beds) and 100 same day beds and provides critical health care infrastructure and health care education to the people of South Australia.
Celsus Chief Executive Officer, Di Mantell, said the Sustainability Loan was part of Celsus’ and its investors’ commitment to environmentally and sustainable practices within South Australia.
“This innovative financing structure enables Celsus to highlight their commitment to both social and environmental benefits to its shareholders and the South Australian community. We are proud to be a leader in the new world of sustainable finance,” Ms Mantell said.
“The lending market is going through a large shift in which preferences for lending are moving toward borrowers with strong ESG credentials. This has accelerated since the beginning of 2021 and is now showing in competitive pricing and volume results for borrowers that can align with ESG related frameworks such as the Green and Social Loan Principles.”
Ms Mantell said the Royal Adelaide Hospital was designed and constructed to minimise the impact on the environment.
“This site boasts a total of 3.8 hectares of landscaped environment. It includes more than 70 internal themed courtyards and sky gardens across the hospital’s nine levels with special features such as a Spinal Garden and Aboriginal Garden, creating a 1.6-hectare footprint of green space within the hospital,” she said.
“High efficiency water fittings have been incorporated and water is captured and recycled throughout the facility, while an onsite cogeneration system can provide heating to the building’s domestic hot water.”
“The social impact of the RAH is seen in the daily delivery of a range of complex and essential services at the largest public hospital in South Australia for the diverse population of Adelaide and South Australia. The RAH is also South Australia’s largest accredited teaching hospital offering a range of training positions across medical, nursing and allied health sciences.
The Social Loan Principles are a recent market development, being published for the first time in April 2021. This transaction is one of a number of transactions which have executed a loan facility aligned to these principles since, and one of the first globally to align to both the Green Loan Principles and the Social Loan Principles as a Sustainability Loan.
Celsus is the Special Purpose Company responsible for managing the consortium that designed, financed, constructed and commissioned the Royal Adelaide Hospital, and that now manage a range of non-clinical services and maintains the world-leading facility under a 30-year contract until 2046. Commissioned in September 2017, the Royal Adelaide Hospital is the most advanced hospital in Australia.
The facility is managed by Celsus under a Public Private Partnership (PPP) framework with the South Australian Government and operated by the public sector (SA Health through the Central Adelaide Local Health Network (CALHN)) which also provides all core clinical services, staffing, teaching, training and research.
The Mandated Lead Arrangers comprise 4 Australian banks and 14 international banks.
- Australia and New Zealand Banking Group
- Bank of China
- Commonwealth Bank of Australia
- Crédit Agricole CIB
- HSBC Bank
- Industrial and Commercial Bank of China
- ING Bank
- Kookmin Bank
- Mitsubishi UFG
- Mizuho Bank
- National Australia Bank
- Nippon Life Insurance
- Société Générale
- Sumitomo Mitsui Trust Bank
- United Overseas Bank
- Westpac Banking Corporation