Commonwealth Bank and ANZ have arranged a A$920 million syndicated sustainability linked loan for power company Endeavour Energy, claiming it is the first such financing in Australia for an electricity distributor.

The funds can be used for general corporate purposes but pricing is tied to Endeavour achieving a set of sustainability performance targets that cover greenhouse gas emissions reduction, landfill waste diversion, net habitat gain and mental health and wellbeing.

To reduce emissions, Endeavour has committed to achieve a 40 per cent reduction in Scope 1 and Scope 2 emissions by 2030.

Scope 1 emissions are the emissions released to the atmosphere as a direct result of an activity, such as emissions produced from manufacturing processes, operating trucks or production of electricity from burning coal.

Scope 2 emissions are the emissions released from the indirect consumption of an energy commodity. Emissions produced by burning coal are Scope 1 emissions for the power station operator and Scope 2 emissions for users of that power.

Line-loss emissions, relating to energy lost in transit, are not included in Endeavour’s target. These are deemed to be outside the company’s control.

Endeavour said in a statement that it is supporting renewable energy generation to optimise the balance of renewables in its system. It supplies energy to 2.6 million people in New South Wales.

It has given a commitment to report on these and other initiatives targeted in the funding.

CBA and ANZ acted as joint sustainability co-ordinators and lead arrangers. They also participated in the syndicate, which included a total of 17 banks.