Global private equity fund (PEF) manager EQT Partners said on the 23rd that it raised a total of $4.4 billion (about 6.5 trillion won) in sustainability-linked loans (SLL) for the "BPEA Private Equity Fund IX." An SLL refers to a product in which the lending rate varies depending on the degree of achievement of ESG targets.
According to EQT, this SLL is the largest in Asia. In 2021, EQT entered into a $3.3 billion (about 4.8 trillion won) SLL through the "BPEA Private Equity Fund VIII." This loan is the third SLL raised in the Asia region. The funds raised are expected to be used to support fund closing and expense execution.
An SLL sets sustainability indicators and targets for each investment and provides rate incentives based on the level of performance achieved. It operates sustainability indicators tailored to industry characteristics together with governance indicators for each portfolio company, and climate targets are also established by company.
According to EQT, the metrics and targets related to this loan are adjusted by three institutions: BNP Paribas S.A., Crédit Agricole S.A. CIB, and ING. The company also said an independent external adviser verifies the performance achieved each year.
Meanwhile, BPEA Fund IX is the largest-ever Asia-Pacific–dedicated PEF, with a total size of $15.6 billion (about 23 trillion won), which reached final closing in Apr. this year.