Canberra, Dec 13 (IANS): The Commonwealth Bank of Australia (CBA), in partnership with US financial services company Northern Trust, announced on Monday that it would be offering A$50 million ($35.88 million) in new "green loans".
The scheme, dubbed the Green Repurchase Agreement or Green Repo, is the first stepping stone of CBA's move towards a larger portfolio of green investments, reports Xinhua news agency.
In its 2021 annual report, the bank announced that it would increase its portfolio of green investments to A$70 billion by 2030.
The latest pooling of cash would help finance "green labeled" assets in Australia including energy-efficient buildings, solar farms, low carbon transport projects or green mortgages.
Andrew Hinchliff, Group Executive of Institutional Banking and Markets at CBA said this product and products like this will be key to "allowing more capital to be directed to the assets that will drive the transition to net-zero".
"Building efficient, smart, green infrastructure is critical to creating the economy of tomorrow and advancing Australia's transition journey," he said.
The agreement would provide an alternate, exclusive channel through which green projects could apply for funding under more accommodative repayment conditions.
It marks Australia's first involvement in the international not-for-profit, Climate Bonds Initiative (CBI), which has mobilized banks around the globe to engage in the funding of green projects.
As part of its green push, the bank has also upped its investment at the individual level, providing low-interest loans to farmers that are making upgrades that would reduce greenhouse emissions, and to households installing solar panels on their homes.
Chris McLachlan, acting executive general manager of Global Markets at CBA, said the bank was excited to be leading Australia into this new world of financing.
"Investor demand for sustainable finance is growing rapidly, and there is huge interest in financial products that cater to the needs of institutional investors while also helping drive real-world change."