Geely Automobile Holdings Ltd (HK.0175) (Geely Auto) has become the first Chinese automaker to secure an overseas sustainable club loan. The three-years US$400 million facility will be used to support Geely Auto’s R&D of technologies and production of vehicles in new energy segment, enabling the company achieve its carbon neutrality goal by 2045.
The oversubscribed club loan – in which multiple lenders collaborate with the borrower on financing sustainable initiatives – had HSBC as the Sole Global Coordinator and Joint Sustainability Structuring Bank as well as participation by six other global banks, namely BOC Hong Kong, BNP Paribas, Bank of America, Nanyang Commercial Bank, Standard Charter and ANZ Bank. The oversubscription for the club loan reflects lenders’ confidence in Geely Auto’s growth prospects as well as the company’s strong capital markets appeal.
The loan agreement follows the launch by Geely Auto in May 2022 of its “Sustainable Finance Framework”, outlining the company’s future issuance of green and sustainable development bonds and loans. The issuance of the US$400 million sustainable club loan is a milestone achievement under this framework. The loan showcases the innovation and expansion of the company’s financing channels, pioneering a new way forward in the financing of green projects.
The diversification of financing will further improve the company’s financial efficiency, reduce debt financing costs, and provide strong financial support for Geely Auto’s development as it continues to expand in the new energy vehicle market.
Geely Auto aims to integrate sustainable development into its corporate governance. The company has set a goal to achieve a 25% reduction in whole vehicle lifecycle carbon emissions by 2025 and carbon neutrality by 2045. To achieve its goal of carbon neutrality by 2045, carbon emissions reduction plans have been formulated on the supply, manufacturing and end-user elements of Geely Auto’s operations. To date, Geely has revealed a diversified technological development route to achieve carbon neutrality which includes pure electric EVs, hybrid powertrains, green methanol fuel power, and battery swapping.
This year, the company has released several new energy models including efficient hybrids (Xingyue L, Emgrand L Hi-P, Lynk & Co 01 EM-F, Lynk & Co 01 EM-P), pure EV (Geometry E, Geometry G6, Geometry M6, Zeekr 001ME), and methanol hybrids (Emgrand Methanol Hybrid). The introduction of new models has already had a positive impact on the company’s performance with new energy vehicle sales. From January to July 2022, Geely Auto’s new energy vehicle sales has exceeded 140,000 units and in July, new energy vehicles by the company accounted for a record high 26.1% of all sales.
Geely Auto regards sustainable development and reducing carbon emissions as an important strategic goal in its corporate development. The company’s ESG performance has been recognized by many around the world. To date, Geely Auto has been selected as a constituent of the “Hang Seng ESG 50 Index,” “Hang Seng Corporate Sustainability Benchmark Index,” and the “FTSE Social Responsibility Index.”
Geely Auto will continue to focus on the electric and intelligent transformation in the automotive industry, cooperate with global partners to improve its sustainable competitiveness, and contribute to global sustainability.