Geely-owned Volvo Cars has signed a EUR1.3bn sustainability-linked revolving credit facility, renewing an undrawn EUR 1.3 billion credit facility signed in 2017.

VCC said the successful transaction 'underlines the growing confidence in the company's financial and operational transformation'.

The renewed facility also links to Volvo Cars' sustainability plans: as a sign of its ambition to become a climate neutral company by 2040, interest rate margins for the facility are linked to Volvo Cars' progress in reducing its carbon emissions.

The facility is backed by a group of leading global and regional banks, underlining the financial community's support for Volvo's climate plan.

"This new credit facility underlines the financial industry's pivotal role in stimulating and supporting sustainable development," said Carla de Geyseleer, chief financial officer. "It also reinforces Volvo Cars' commitment to sustainable financing, following the recent successful issuance of our first EUR 500 million Green Bond."

The three-year facility has two one-year extension options and will serve as a back-up facility for general corporate purposes.

Citi, HSBC, Nordea and SEB acted as coordinators for the agreement and the facility encompasses 21 participating banks. The banks within the group are well diversified and will form the core relationship bank group for Volvo Cars globally.