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Westpac supports Sustainability-Linked Loan - first of kind for Australian airport

17 July 2019

Accomplished airport operator Queensland Airports Limited (QAL) has secured financing from Westpac for its Gold Coast Airport redevelopment, in the form of a sustainability-linked loan.

The $100 million loan – based on carbon accreditation through the Airports Council International program and a reduction in carbon emissions – is the first of its kind to be taken out by an Australian airport.

The green loan market aims to facilitate and support environmentally sustainable economic activity, with proceeds being allocated to finance or refinance green projects or assets.

Sustainability linked loans are designed to incentivise a borrower to achieve ambitious, predetermined sustainability performance targets.

Smart organisations are taking a ‘sooner rather than later’ approach to sustainability to benefit from the tangible financial rewards, according to Westpac’s General Manager Corporate and Institutional Banking, Didier Van Not.

“Westpac is helping finance the transition to support a lower carbon economy. A sustainability-linked loan is great way to do this because it rewards corporates borrowers, if they meet pre-determined sustainability targets,” he said.

“QAL has taken a leading role in demonstrating how finance can be structured to take advantage of these discounts while making a difference to its ESG performance.”

QAL CFO Amelia Evans said the business was committed to strengthening its performance in the area of Environment, Social and Governance (ESG) – and obtaining sustainability-linked loans were another step towards that.

“ESG is an area QAL is increasingly focused on, and we have already delivered several sustainability projects across our airports in the past few years,” she said.

“Some of these projects include reducing greenhouse gas emissions at Gold Coast Airport by replacing lighting with LED, upgrading air-conditioning units and replacing energy efficient drive motors within our baggage handling system.

“At our other ports, we installed 820 solar panels on car park shade structures at Mount Isa Airport, reduced electricity consumption by 17 per cent with a series of building management system upgrades in Townsville, and solar power roof installations have offset about 95 per cent of Longreach airport’s daytime electricity usage.”

The Gold Coast Airport redevelopment is underway, with work starting this month on the foundations for the southern terminal expansion. The multi-year project, designed to improve the customer experience and address current and future capacity issues, will see the terminal floor area doubled.

Ms Evans said the level of development activity underway at Gold Coast Airport precinct right now was unprecedented.

“Construction of our first airport hotel is progressing well, and once we have completed the southern terminal expansion, we will start work on the existing terminal refurbishment,” she said.

Ms Evans said several key sustainability initiatives were planned for the southern terminal expansion, including lighting controls and energy efficient chillers.

Recognising the continued support of QAL’s financiers, Ms Evans said: “By working in partnership with our financiers, we can achieve a number of mutual benefits, such as these unique sustainability-linked loans”.

QAL operates the Gold Coast, Townsville, Mount Isa and Longreach airports, welcoming about 8.5 million passengers last year, with that figure set to more than double over the next two decades.


Airport Carbon Accreditation

The Airport Carbon Accreditation program is the only global standard for carbon management at airports. It was launched by Airports Council International Europe (ACI EUROPE) in 2009. The program is composed of four progressively ambitious levels of accreditation.

The program is celebrating its tenth anniversary, with the current participation figure standing at 275 accredited airports worldwide. The level of uptake has seen unprecedented growth in all world regions in the past reporting year. From May 2017 to May 2018, accredited airports succeeded in collectively reducing the CO2 emissions under their direct control by 347,026 tonnes.