(Bloomberg) -- Ant Group Co. has completed the first sustainability-linked loan arrangement in China’s tech sector.

The Chinese fintech company spun off from Alibaba Group Holding Ltd. has arranged a sustainability-linked revolving credit line with French bank BNP Paribas SA, according to a statement Monday. Sustainability-linked loans (SLLs) have interest rates that change depending on if corporations are able to meet certain environmental goals. 

Ant and BNP Paribas declined to disclose the size of the credit facility. The deal is the first-ever sustainability-linked loan in China’s technology sector, according to BNP Paribas China. 

Although China likes to tout its status as one of the world’s biggest issuers of green bonds, sustainability-linked loan volume among Chinese firms has grown at a slower pace compared to regional peers. Australia and Singapore were the top markets for SLLs in 2021, according to Bloomberg-compiled data.

For Ant’s sustainability-linked credit facility, the company’s adherence to targets around using renewable energy and donating a percentage of revenue to environmental protection projects will be checked annually. If the targets are met, the interest rate on the loan will be lowered. 

While still viewed as a niche segment within sustainable finance, SLLs are growing quickly in the region. Such borrowing by Asian companies outside of Japan last year was $52.6 billion, more than six times that in 2020. Although SLL activity has fallen nearly 40% this year as inflation drags down fixed-income markets, agrochemicals company Syngenta Group (HK) Holdings Co. completed Asia’s biggest-ever sustainability-linked loan of $4.5 billion earlier this month.

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