PRACTICE NOTES
Green Loan Principles: Eligibility, Structuring and Drafting with LMA Green Loan Provisions (2024) and 2025 Updates; Reporting, Reviews and Greenwashing Risk, including RCFs and Refinancing
This Practice Note outlines green loans and the principal considerations when preparing a green loan agreement. It centres on the Green Loan Principles (GLP) issued by the Loan Market Association (LMA), the Asia Pacific Loan Market Association (APLMA) and the Loan Syndications and Trading Association (LSTA)...
Clarifies the meaning of a green loan
Introduces the GLP and the accompanying GLP guidance
Sets out the four core components of a green loan under the GLP and summarises the related guidance
Condenses GLP and GLP guidance on what qualifies as a green loan, on reviews, and on greenwashing risks
Provides sources for precedent wording, including the Loan Market Association draft provisions, plus drafting pointers
What is meant by a green loan?
Under the GLP, green loans encompass any form of loan instrument and/or contingent facility (for example, bonding lines, guarantee lines or letters of credit) where the proceeds, or an equivalent amount, are applied solely to fund, re-finance or guarantee, in whole or in part, new and/or existing eligible Green Projects...
Banking & Finance