Australia's Fortescue Secures $2 Billion Yuan-Denominated Loan for Green Energy Initiatives
On August 8, Fortescue (FMG.AX) disclosed the acquisition of a syndicated loan valued at 14.2 billion Chinese yuan (approximately $1.98 billion USD), aimed at accelerating its decarbonisation initiatives. This funding follows the company’s recent withdrawal from green hydrogen ventures in both the United States and Australia.
The loan arrangement coincides with Fortescue’s strategic overhaul of its clean energy portfolio, occurring amid a broader shift in U.S. policy under the Trump administration, which has deprioritized green energy development.
In July, Fortescue confirmed the termination of its hydrogen projects located in Arizona and Queensland. This announcement came shortly after Chairman Andrew Forrest and Australian Prime Minister Anthony Albanese concluded a diplomatic visit to China.
Forrest, often referred to by his nickname "Twiggy," commended China’s industrial capabilities and technological leadership, as well as its commitment to sustainable investment. He also underscored Fortescue’s expanding engagement with Chinese financial institutions.
“As America steps back from investing in what will become the world’s most transformative industry, China and Fortescue are moving forward with the green technologies that will power the global industrial transition,” Forrest stated.
He emphasized that the loan agreement strengthens Fortescue’s longstanding ties with Chinese partners and opens the door to broader collaboration.
The five-year facility carries a fixed annual interest rate of 3.8% and is supported by a consortium of lenders from China, Australia, and other international markets, including Bank of China and Industrial and Commercial Bank of China.
According to a company representative, this marks the first time an Australian enterprise has secured such a facility without restrictions on fund allocation. Fortescue confirmed that the capital will be directed toward general corporate purposes and its decarbonisation roadmap.
