Green Loans

Environmental
:   
Financing
April 17, 2023

Green loans are loans that are specifically designed to finance projects that have a positive environmental impact. These loans are typically offered by banks or other financial institutions to help fund projects such as renewable energy installations, energy-efficient building upgrades, sustainable agriculture, and other environmentally-friendly projects.

Green loans can be structured in different ways, but they often have lower interest rates and longer repayment terms compared to traditional loans. This is because lenders recognize that green projects may have a longer payback period and can take time to generate a return on investment.

Similar to sustainability bonds, green loans are becoming increasingly popular as more businesses and organizations seek to reduce their environmental footprint and implement sustainable practices. Some financial institutions also offer certification or labeling schemes for green loans to help borrowers demonstrate their environmental commitment to stakeholders.

Green loans are often used by businesses and organizations looking to finance sustainable initiatives that might otherwise be challenging to fund. By offering favorable terms, green loans can help incentivize companies and organizations to pursue environmentally-friendly projects and help drive the transition to a more sustainable economy.

More Information

Explore more insights

See All Insights
Financing

Sustainability-linked Bonds

Sustainability-linked bonds are structured so that the issuer is incentivized to meet certain sustainability performance targets, such as reducing greenhouse gas emissions, improving worker safety, or increasing renewable energy usage.
Financing

Texas’s 2021 Anti-ESG Law

Texas’s 2021 Anti-ESG Law and 2022 Blacklist refer to legislative and regulatory actions taken by the state of Texas to counteract what it views as discriminatory practices against the oil and gas industry by financial institutions that follow environmental, social, and governance (ESG) principles.
Financing

Final Investment Decision (FID)

FID stands for Final Investment Decision. It's a key phase in the capital project planning process when the decision to make major financial commitments is taken. In energy, FID is the final step in determining whether to move forward with the construction of an infrastructure project. In exploration, FID costs are those directly related to the discovery of oil or another commodity.