ING has acted as the Sustainability Coordinator of Olam International Limited’s newly announced USD 500m sustainability-linked revolving credit facility, which is linked to its sustainability programme.
This is the first sustainability-linked club loan deal in Asia. Olam’s sustainability programme and progress will be assessed by Sustainalytics, a leading independent provider of environmental, social and governance (ESG) research and ratings. The assessment is conducted annually and if the pre-set improvement targets are met, the interest rate of the facility will subsequently be reduced.
As the Sustainability Coordinator, ING assisted Olam in devising the overall concept, setting of the sustainability targets in the customised package of ESG indicators and aligning the documentation for the banks in the club.
Gerrit Stoelinga, CEO for ING Wholesale Banking Asia Pacific, said: “ING is honoured to be Olam’s partner in its sustainability journey. Incorporating sustainability incentives in a loan facility is helping to drive a mind shift in corporate financing. More organisations are partnering with us on such sustainability improvement loans, reflecting the rising interest to integrate sustainability programmes into mainstream business in Asia.”
Olam’s Co-Founder and Chief Executive Officer, Sunny Verghese, said: “We are proud to be the first company in Asia and the agri-sector to secure a sustainability-linked medium term club loan that links interest rate on the loan to achieving clear sustainability targets.
Olam is grateful to the 15 banks that have participated in this innovative facility. We believe that this will serve as a catalyst in further developing sustainability-linked financing in the region. This is a good example of how sustainable companies can become more successful and of how we can ‘do good’ and ‘do well’ at the same time.”
The Olam club loan deal follows ING’s first bilateral sustainability improvement loan in Asia, which was launched in November 2017 with another agri-business group. ING has arranged 11 sustainability improvement loans worldwide including this club loan, in support of companies transitioning towards becoming more sustainable in their business.
