Sustainability-Linked Loan

KPIs are specific metrics used to measure our client’s or the asset’s sustainability performance. They should be important to our clients business and measurable against industry standards. KPIs should be ambitious, and customized to align with the asset being financed.

In short: ESG KPIs vary but often include:

• Reducing CO₂ emissions;
• Achieving a minimum percentage of energy-efficient buildings;
• Transitioning assets to renewable energy sources;

Moreover, we can also agree on other KPI’s, including more Social or Governance- focused metrics. At the end… NIBC’s Sustainability-Linked Loan is tailormade to meet your unique needs.

Sustainability Performance Targets are the specific sustainability goals our clients aim to achieve.

These goals should be ambitious, go beyond normal business operations, and align with our clients overall sustainability strategy. They should be based on recent performance and scientific- or industry benchmarks.

The loan's terms depend on whether our clients meet their Sustainability Performance Targets.

For example: the margin is the interest rate added to the base rate of the loan. In an SLL, this margin can decrease if our client or the property meets the agreed sustainability performance targets—or increase if the targets are not achieved. This structure provides financial incentives for meeting ESG objectives.

SLLs are suitable for clients and properties that:

• Have measurable sustainability targets
• Demonstrate a commitment to track and transparently report progress on a yearly basis toward the Sustainability Performance Targets, including a statement and a verification report
• Clients must get external, independent verification of their progress on each Sustainability Performance Target
• This verification should be done by qualified experts and shared promptly
• Clients can get advice from external experts before signing the loan
• If clients don't get external help, they should document their internal processes and expertise, and share this when asked.

By connecting financing with sustainability outcomes, SLL’s empower our clients to create meaningful environmental and social impact while staying on track to achieve their financial goals.

The best part? SLLs are not limited to exclusively "green" projects—they’re designed to encourage sustainability improvements across the board.

There are guidelines called the Sustainability-Linked Loan Principles (SLLP), created by financial experts to help structure these loans effectively.

We base our Sustainability-Linked Loans (SLLs) on globally recognized Environmental, Social, and Governance (ESG) standards. These include for example:

• Achieving specific CO₂ reduction targets
• Improving energy efficiency (e.g., energy label upgrades)
• Increasing the adoption of renewable energy sources
• Increasing the percentage of energy-efficient buildings in your portfolio
• Sustainalytics ESG Risk Rating
• Absolute Scope 1,2, and 3 GHG emissions

Moreover, we can also agree on other KPI’s, including more Social or Governance- focused metrics. At NIBC, our Sustainability-Linked Loans are truly tailor-made to our clients unique needs.

Properties with plans to improve energy efficiency are highly eligible for SLLs. However, your property does not need a specific label to qualify for an SLL. To be eligible for an SLL you need to have measurable and realistic sustainability goals, as a company or for your property to be financed.

The margin adjustment (discount or penalty) depends on your performance against the ESG KPIs agreed upon at the start of the loan.

The exact range depends on the loan size and the complexity of your sustainability goals and is therefor tailor made.

NIBC’s Sustainability-Linked Loans typically have a term up to 5 years, providing sufficient time to achieve measurable sustainability targets and track progress.

Loan amounts typically range from €10 million to €50 million, depending on the specific asset to be financed and the borrower’s credit profile.

For larger projects, club-deal financing or syndication with other lenders is available, enabling us to provide tailored solutions for even the most ambitious sustainability initiatives.

Let us help you explore the best financing structure for your project.

Not necessarily! You can apply for an SLL as part of:

1. An existing financing structure.
2. A standalone loan designed to meet sustainability objectives.

Our experts will help structure the loan based on your specific needs.

• Lower costs: Achieving agreed sustainability goals will reduce your interest rate.
• Increased asset value: Energy-efficient properties often attract higher valuations and lower operational costs.
• Enhanced reputation: Green and sustainable buildings are more attractive to tenants, investors, and regulators.

At NIBC, we believe in partnering with our clients to drive meaningful progress. By offering SLLs, we actively support our clients’ sustainability journeys while fostering strong, long-term relationships. Together, we aim to create a more sustainable and future-proof real estate sector.