backKing & Spalding advises the Loan Market Association on the “Green Loan Provisions”. The template provides market participants with a proposed form of draft green loan provisions for inserting into LMA loan documentation. The Green Loan Provisions were drafted by Sukhvir Basran who coordinated comments and feedback from an experienced working party of financial institutions, funds and law firms active in the sustainable finance and investment market.
The Green Loan Provisions are for use in the LMA precedents across EMEA and are intended to be used across sectors and asset classes. They provide a drafting framework to assist market participants in the structuring and negotiation of green loan terms and build on the LMA’s Green Loan Principles as well as evolving ESG regulation, standards and benchmarks. The Green Loan Provisions also include extensive drafting notes setting out points for parties to consider when undertaking a green loan transaction.
The LMA is a trade body for the syndicated loan market in EMEA. The LMA publishes model documentation, market guidelines and best practices for use in both primary and secondary syndicated loan markets with a view to achieving more standardisation of widely accepted market practice.
Commenting on the document, Gemma Lawrence-Pardew, Head of Sustainability and Director at the Loan Market Association said:
Our hope is that, in creating this template we will drive greater transactional efficiency, aiding the green loan market to retain the incredible momentum gathered since its inception less than a decade ago. Documentation certainty is vital in creating market credibility, and when paired with our Green Loan Principles and accompanying guidance, we hope to see an even more active and robust green loan market in 2025.
Sukhvir Basran, Partner at King & Spalding LLP and LMA's drafting law firm on this project, said:
Green loans are an essential part of sustainable finance and play a critical role in supporting a just transition to a sustainable future. The LMA’s green loan provisions provides market participants with a drafting framework which builds on the Green Loan Principles, evolving regulation and ESG standards. We hope this template will enable lenders and borrowers to structure and negotiate green loans more efficiently and impactfully and allow for rapid scaling of the green loan market.