Canberra Metro’s Light Rail Project is leading the way in low carbon transportation, under an Australian-first financing agreement supported by Commonwealth Bank (CBA).

CBA has helped Canberra Metro to refinance its $286 million debt facility with a Green Loan – the first certified Green Loan to be executed by a transport Public Private Partnership (PPP) in the Australian market.

The financing, for the initial stages of the Canberra Light Rail Project, has Climate Bond Initiative certification under the Low Carbon Transport Criteria. CBA was a joint green coordinator for the transaction.

Projects qualify for green loans based on a number of sustainable management criteria such as renewable energy use, energy efficiency, clean transportation, pollution control, and climate change adaptation.

Canberra Metro is running on 100 per cent renewable electricity and utilising environmentally friendly measures across its operation.

CBA Managing Director Sustainable Finance and ESG, Charles Davis, said: “we’re committed to playing our part in limiting climate change, and this includes supporting our customers to do the same.

“The financing for Canberra Metro is an excellent example of how the public and private sector can work together to provide innovative sustainable finance solutions, that support the economy-wide transition to net zero emissions.”

Mr Davis said the bank was continuing to see strong interest in green and broader sustainable products across a number of sectors, as more companies seek to improve their sustainability performance and support a low carbon future.

“Gaining green loan accreditation demonstrates that a project or asset is consistent with a low carbon future – it signals to investors and the market that this asset has clear green attributes and outcomes,” he said.

“A green loan provides borrowers with access to a deeper pool of liquidity, and investors with access to a product, which ultimately can lead to better distribution and pricing.”

CBA is committed to developing innovative solutions to help those customers who are looking for more sustainable opportunities. Earlier this year CBA executed an Australian-first sustainability-linked loan, which was structured to achieve better social outcomes in addition to providing better environmental outcomes. The $400m loan incentivises Wesfarmers to reduce carbon emissions as well as increase indigenous employment opportunities and participation. This loan was recognised internationally by the UK-based 2020 Environmental Finance IMPACT Awards, taking home the Impact project/investment of the year: Social inclusion/community development award.