Mitsubishi UFJ Financial Group (MUFG) is extending a loan to public transport operator Transdev for a fleet of new buses in Gothenburg, Sweden, alongside Societe Generale whose participation is being supported by the European Investment Bank (EIB).
The 1.2 billion Swedish krona (US$145 million) structured finance transaction will provide Sweden’s second largest city with low-carbon public transportation. The deal will facilitate the acquisition of 297 electric and biofuel buses being leased to Transdev for its use on five concessions in Gothenburg.
In March 2019, Transdev won five ten-year contracts to operate bus services in Gothenburg from December 2020. The commissioning of the green bus fleet, running exclusively on electricity from renewable energy or on biofuel, supports Gothenburg's target for all city transport to be electric by 2030.
In order to provide Transdev with the best financing terms, Societe Generale’s participation will be funded by the EIB. The EIB, under its recently approved Climate Bank Roadmap, will dedicate half of all its investments to the fight climate change by 2025. Societe Generale has a target to help raise 120 billion euros (US$146.8 billion) between 2019 and 2023 through a range of sustainable financing solutions (credit, bonds, advisory). By the end of September 2020, it had already achieved 60% of this target.
In May 2019, MUFG announced its target to provide a total of 20 trillion yen (US$194 billion) in sustainable finance between 2019 and 2030 to help build a sustainable society, and match the UN's Sustainable Development Goals through the provision of financial services to clients.
MUFG and Societe Generale also assisted Transdev in achieving the first green leasing transaction for the wider Transdev Group, and set up a green loan framework in line with the Loan Market Association's Green Loan Principles.
"Backed by our rail and wider transport experience, green buses will clearly become an important area for MUFG alongside our broad range of initiatives to support the energy transition,“ says Robert Bartlett, head of infrastructure for MUFG EMEA.
MUFG Bank and Societe Generale acted as co-arrangers, lenders, hedge counterparty and joint green structuring adviser to Transdev. Societe Generale also acted as lease arranger and agent.
Law firms Norton Rose Fulbright Paris and Hammarskiold advised the two co-arrangers and the lessor on the transaction. De Gaulle Fleurance & Associes advised Transdev. KPMG assisted the lenders on value-added tax matters in Sweden.