AAP Finance

$100m ‘green’ loan for Gold Coast Airport

By AAP Newswire

The operator of Gold Coast Airport will be encouraged to reduce carbon emissions through $100 million in "green" loans from Commonwealth Bank and Westpac.

Queensland Airports Limited will use the funding to redevelop the airport and double its terminal floor area over several years, and the interest rates will fluctuate depending on whether the airport is able to meet emissions targets.

Commonwealth Bank is funding $75 million of the sustainability-linked loan and Westpac $25 million.

Commonwealth Bank group executive Andrew Hinchliff calls it a "landmark transaction for QAL and for ourselves", and the bank's first sustainability-linked loan transaction.

"Developing sustainability-linked lending products for our government, financial and corporate customers is a big step in the transition to a low-carbon economy," he said on Wednesday.

"We expect demand for these products to continue to grow as borrowers become increasingly focused on how their investment decisions impact the environment."

Sydney Airport received a $1.4 billion sustainability-linked loan in May that it described as the first multi-bank sustainability-linked loan in Australia.

It has a direct link between the airport's sustainability performance and its funding costs.

Queensland Airports said the southern terminal expansion would cut emissions through lighting controls and energy-efficient chillers.

It has already cut greenhouse emissions at the airport by taking steps to be more energy efficient such as replacing lighting with LEDs.

Construction of the airport's first hotel is underway and the foundations of the soutehrn terminal expansion would begin this month, the airport said.