Paul Donnelly
Senior Legal Counsel
Paul has held an in-house role of senior legal counsel at CaixaBank S.A., UK Branch since the beginning of 2016. Paul has worked on a wide range of banking matters, including acquisition and leveraged finance, investment grade corporate lending, property finance, restructurings and structured financings from previously working as an associate at the London office of Skadden Arps and Nabarro LLP.
Practice Area
Panel
- Specialist Panel
2 Contributions by Paul Donnelly
PRACTICE NOTES
Drafting and negotiating LMA sustainability-linked loan provisions: margin ratchets, reporting and verification, declassification and publicity restrictions, amendment events, and sustainability co-ordinator protections
Key takeaways
Purpose of the SLL Provisions: The LMA’s Sustainability-Linked Loan Provisions set out suggested wording to embed sustainability-linked terms within loan documentation.
Function and Scope: In SLLs, the interest margin flexes according to the borrower’s progress against pre-agreed SPTs, measured by defined KPIs.
Sustainability Margin Adjustment: A ratchet applies so the margin moves up or down based on the count of SPTs achieved in each SLL Reference Period, with scope to customise triggers and the economic effect.
Compliance and Reporting: After every SLL Reference Period, the borrower must provide a Sustainability Compliance Certificate, backed by a Sustainability Report and an independent Verification Report evidencing outcomes and approach.
Consequences of Breach: Breaching sustainability-linked undertakings or representations typically does not constitute an event of default; instead, SPTs are treated as unachieved, which feeds into margin calculations and may precipitate declassification.
Declassification Mechanism: A declassification regime can switch off the ‘sustainability-linked’ label following specified events (such as repeated breaches or significant corporate changes), at which point the margin ratchets no longer apply.
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Banking & Finance
PRACTICE NOTES
Project Finance and ESG: A Practitioner’s Guide to Standards, Due Diligence, Documentation, Disclosure and Risk Mitigation
Introduction
Purpose of this Practice Note
This Practice Note maps the principal environmental, social and governance (ESG) considerations influencing project finance transactions. It explores how lenders and sponsors weave ESG standards into due diligence, contractual suites, and oversight after financial close. It also reviews the tightening interplay between soft-law norms and binding regulation, as project finance—once anchored chiefly in financial covenants and risk allocation—now finds its identity equally in its ESG profile. This shift unfolds amid intensifying regulatory focus, investor behaviour and public scrutiny. The aim is to equip practitioners with a clear analytical framework for navigating this evolving discipline.
Relevance of ESG in Project Finance
ESG considerations have grown in prominence in project finance because they shape investment choices, risk management and long-term business sustainability. Investors and financiers apply ESG criteria to assess corporate conduct, anticipate future financial performance, and manage risks, notably around climate change, sustainable financing and green investments. Likewise, ESG factors are becoming integral to regulatory frameworks and industry standards, for example the Equator Principles referenced below. In the UK, the government has introduced initiatives like...
Banking & Finance
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