BMO Financial Group and Export Development Canada (EDC) has announced an agreement to bring sustainable finance solutions to medium- and large-sized Canadian exporting businesses, to help them transition from carbon-intensive operations to those that can eliminate or significantly reduce emissions. As part of the agreement, BMO is the first financial institution to offer EDC’s new Sustainable Financing Guarantee (the Guarantee), a product available through EDC’s Sustainable Financing Program – a key source of funding to enable the support that Canadian businesses will need.
“As part of our Purpose to Boldly Grow the Good in business and life, BMO is committed to being our clients’ lead partner in their transition to a net-zero world,” said Jonathan Hackett, Head, Sustainable Finance and Co-Head, Energy Transition Group, BMO Financial Group. “Helping customers adapt and thrive through this transition requires a thoughtful, balanced and accelerated approach, informed by science, common sense and bold but practical solutions. The offering with EDC represents one of the innovative strategies that will help us meet these important goals.”
The Guarantee is a risk-sharing solution co-developed to increase the capacity of Canadian financial institutions, like BMO, to provide companies engaged in eligible sectors with loans and financing that support their carbon reduction initiatives. The program will provide the initial $1 billion in financing over the next three years to support sustainable initiatives, including hydrogen, renewable infrastructure and grid modernization, across nine carbon-intensive sectors. EDC will guarantee up to 50 per cent of BMO’s term loan – up to a maximum of US$60 million per obligor, for a period of up to seven years – providing more capacity for BMO to support their exporting clients’ low carbon transition and export growth.
“We understand the urgent need to address climate change, and as Canada’s export credit agency, we have a role to play,” said Justine Hendricks, Senior Vice President and Chief Corporate Sustainability Officer at EDC. “Working with Canada’s financial institutions like BMO, we can support Canadian businesses’ access to the financing they need to be a part of this important transition in Canada and globally. With EDC’s commitment to achieve net zero by 2050, both organizations are leading the way to help businesses innovate and achieve long-term business growth in a way that is sustainable, equitable and in line with a low-carbon future.
“BMO’s commitment to sustainable finance and their efforts to help Canadian companies adapt and remain competitive in the ever-changing global economy aligns with EDC’s goals, making them a natural fit to launch this important initiative,” said Ms. Hendricks. “Going forward, as we continue to build our sustainable financing stream, we look forward to working with other financial institutions to help Canadian businesses support the transition to net zero.”