Standard Chartered Completes First Impact-Focused Subscription Finance Facility

Standard Chartered, a UK-based multinational banking and financial services company with $688 billion in assets, announced earlier this week it completed its first-ever sustainable use of proceeds subscription finance facility.

According to Standard Chartered, funds will be drawn by the manager and will be used to bridge investments into mid- to large-cap companies that align with the United Nations Sustainable Development Goals (SDGs), including combating climate change, supporting financial inclusion, and tackling the lack of universal access to health and education.

“All projects funded by the facility will have to meet stringent criteria which include measuring the impact of the project on specific SDGs, reporting on the Fund’s use of proceeds and on-going reporting and monitoring after the investments have been made.”

Speaking about the facility, David Law, Global Head of Financial and Strategic Investors Group at Standard Chartered, stated:

“We believe we have an important role to play in a sustainable world, and structuring and funding SDG-aligned projects can help do just that. We want this new transaction to both support and promote further investment by private equity fund managers in sustainable projects while also maintaining the integrity of the sustainable loan market.”

The facility details:

• The capital call facility will last at least one year.
• Facility is structured as an umbrella sustainable secured capital call facility.
• SCB acted as the sole Sustainability Coordinator.

• The investment strategy is set up to solely invest in sustainable projects and the investment process is based on three key elements:

  • Logic Model: Establishment of a formal link between a potential investment and an SDG;
  • Impact management: Formal management of impact aligned with the IFC Operating Principles, monitoring and reporting services.
• The facility agreement incorporates on-going reporting and monitoring requirements with regards to the investments made and the use of proceeds.