Standard Chartered Group supports Tianqi Lithium in completing the first syndicated loan sustainable linked structure change

The global new energy vehicle industry is booming, and lithium, the core raw material, is known as a new green driving force. As a key element of power batteries, lithium plays an important role in promoting the electric vehicle revolution and clean energy transformation. With the increasing global attention to issues such as reducing carbon emissions and addressing climate change, the importance of lithium has become more prominent.

The development of the lithium industry has a significant impact on the realization of China's dual carbon goals and global sustainable development, and also requires a lot of financial support. A report released by Standard Chartered's global research team shows that in order to achieve the carbon neutrality goal, China needs to invest up to RMB 127-192 trillion in the decarbonization process before 2060, equivalent to an average annual investment of RMB 3.2-4.8 trillion. Diversified sustainable financing tools will greatly promote the lithium industry and new energy vehicle industry to accelerate low-carbon transformation.

In May 2023, Standard Chartered Group, as the joint sustainable development coordinator, completed the sustainable-linked structure change for the original three-year US$400 million syndicated loan of Tianqi Lithium Co., Ltd. (hereinafter referred to as "Tianqi Lithium"), and obtained dual certification from CECEP Environmental and ISS.

Tianqi Lithium's first sustainable development-linked syndicated loan

Tianqi Lithium is a leading lithium-based new energy material company in China and the world, listed on both the Shenzhen Stock Exchange and the Hong Kong Stock Exchange. The company's business covers key stages of the lithium industry chain, including the development of hard rock lithium mineral resources, the processing and sales of lithium concentrates, and the production and sales of lithium chemical products. At the same time, it strategically deploys lithium resources in China, Australia and Chile, and establishes partnerships with international customers by leveraging its vertically integrated global industry chain advantages to jointly help the electric vehicle and energy storage industries achieve long-term sustainable development of lithium-ion battery technology.

Standard Chartered and Tianqi Lithium have a deep consensus on promoting sustainable development with the help of financial instruments. Against this background, the two parties have joined forces to complete the sustainable linkage structure change of the syndicated loan. As the joint sustainable development coordinator of the sustainable structure change of the syndicated loan, Standard Chartered continues to output its professional capabilities and add icing on the cake to the sustainable financial solutions of the Chinese electric vehicle industry chain.

Through this change, the interest rate of this loan is linked to Tianqi Lithium's quantitative commitments to sustainable development, such as greenhouse gas emission intensity and water recycling rate, thereby helping Tianqi Lithium to further plan and achieve its sustainable development commitments through financial incentives.

Lu Jing, Vice President of Standard Chartered China and Managing Director of Corporate, Financial Institutions and Commercial Banking, said: "We are very honored to support Tianqi Lithium in completing the certification of its first sustainability-linked loan. As a leading global lithium company, Tianqi Lithium is committed to becoming a global leader in sustainable development in the new energy sector by 2030. As a financial partner of Tianqi Lithium, we hope to continue our professional advantages in the field of sustainable finance, help Tianqi Lithium achieve its sustainable goals, and jointly promote the sustainable development of China's electric vehicle industry."

▲ Lu Jing, Vice President of Standard Chartered China and Managing Director of Corporate, Financial Institutions and Commercial Banking

Standard Chartered joins hands with new energy industry to create a "lithium" future

China is one of the world's largest automobile markets and energy consumers, and is also the world's largest lithium battery producer and consumer. In the past two years, as the automobile industry has transformed into electric vehicles, battery demand has skyrocketed, and lithium resource supply has been tight.

According to the data from the International Energy Agency, the world will face a 50% lithium demand gap by 2030, relying solely on existing and under-construction lithium mining projects. On the one hand, market prices continue to fluctuate sharply, especially the price of lithium carbonate, which once rose 10 times from 2021 to 2022. On the other hand, China's domestic lithium resources are very limited, accounting for only 7% of the world's total reserves, and development is difficult and costly. Ensuring the supply of lithium resources is an important pillar to support the further globalization of China's new energy vehicle industry.

The financing to support Tianqi Lithium will help the leading company to improve its lithium resource self-sufficiency rate, accelerate development, technological breakthroughs, overseas operations, etc., thereby improving the overall competitiveness of the lithium industry chain, and promoting the coordinated development of China's new energy vehicle industry chain. From lithium mining and refining to battery manufacturing and vehicle production, a complete industrial chain will be formed, improving the overall efficiency and sustainability of the industry.

Changes to the sustainable linkage structure of syndicated loans usually encourage borrowers to take sustainable development measures in terms of ESG. The goals of this linkage are also closely related to two ESG-related indicators: reduced carbon emission intensity and improved water recycling rate. Through innovative development in the field of ESG, Tianqi Lithium is expected to improve the competitiveness of its products and play a demonstration role in the new energy vehicle industry chain.

Tracy Wong, Managing Director and Head of Sustainable Finance, Asia, Standard Chartered Bank, said: "Standard Chartered Bank has pledged to mobilize US$300 billion for green and transformation financing by 2030 to accelerate the low-carbon transformation of enterprises, and the new energy vehicle industry is an important part of clean transportation. We are honored to use Standard Chartered's rich sustainable finance experience in the new energy vehicle ecosystem to support Tianqi Lithium in completing its first sustainable linked loan. Standard Chartered hopes to help our clients accelerate their low-carbon transformation through diversified sustainable financing tools."

▲Huang Cuizhi, Managing Director and Head of Sustainable Finance for Asia at Standard Chartered Bank

Since 2018, Standard Chartered Group has established a "Sustainable Finance Department" at the group level to provide a wealth of sustainable finance products and solutions to global customers.

As an active participant in sustainable finance, Standard Chartered Group is familiar with the green standards of domestic and foreign financial markets and can play an important bridging role in the communication between Chinese issuers and green certification agencies. This support for Tianqi Lithium's sustainable financing will also help attract more global investors and partners to participate in China's new energy vehicle industry, providing more support and resources for the overall development of the upstream and downstream of the industrial chain and the promotion of China's dual carbon goals.

Standard Chartered Group, with its comprehensive sustainable financial solutions, works with the new energy industry to create a "lithium" future.