Sustainability-linked loan for Emira Property Fund

The challenge

Emira Property Fund (Emira) is a diversified Real Estate Investment Trust (REIT) with a property portfolio of predominantly South African assets and a growing component of offshore assets. The company is focused on growing the quality and value of its property portfolio to sustain and enhance its distribution growth to its shareholders.

Emira’s sustainability focus is on building the fund while making a tangible, positive impact on the economic and social development of communities and the environment. Emira aims to reduce its environmental impact through:

• Engaging in projects that enhance and reduce Emira’s carbon footprint
• Focusing on renewable energy investments into PV (solar power)

Emira had an upcoming maturity of R200m which it needed to fund.

RMB solution

RMB’s long-term relationship with Emira and recent structuring of Emira’s inaugural sustainability linked bond positioned RMB as the funder of choice. With Emira’s strong sustainability profile and demonstrated track record of using sustainable finance debt products, RMB was able to structure the funding as a sustainability-linked loan (SLL). This structure will further enable Emira to deliver on its sustainability strategy.

RMB was appointed as sole lender and sustainability agent for the R200m SLL. The RMB Real Estate Investment Banking and Sustainable Finance and ESG Advisory teams worked closely together in structuring this SLL for Emira in compliance with the Loan Market Association’s Sustainability Linked Loan Principles. They also worked with Emira to determine the environmental social and governance performance targets for the loan, which are in line with their strategic objectives. The ESG targets included increased use of renewable energy and reduction in carbon emissions.

How did this enable the client?

The SLL enabled Emira to add another tangible milestone to its sustainability journey. Together these outcomes will work to bolster Emira’s sustainability profile. Emira was also able to gain further pricing benefit in the form of a margin ratchet, ensuring a lower cost of funding.

The 4 000MWp should result in around 7 000 tons/annum of avoided carbon. Justin Bowen, National Development Manager and Head of Sustainability for Emira, says: “Our comprehensive environmental sustainability strategy and transparent disclosure support Emira’s purpose of being a provider of great real estate. Properties that are energy and water-efficient and use more renewable resources, ultimately assist our tenants and our business to contain utility costs and lighten our environmental footprints. We are thrilled to include our funders as leading actors in sustainable finance and key role players in our value chain of positive environmental impacts."