RGE, a Singapore-headquartered multinational group of resource-based manufacturing companies, today announced the closing of a three-year, US$1 billion Sustainability-Linked Loan (SLL) for its sustainable agribusiness group consisting of Asian Agri and Apical and a US$1 billion Sustainability-Linked Derivative (SLD) interest rate swap.
US$1 billion SLL:
Commercial Bank of Dubai (CBD) and First Abu Dhabi Bank (FAB) were among the international consortium of Mandated Lead Arrangers and Bookrunners for RGE’s latest SLL which was 1.4 times oversubscribed on its US$1 billion amount, underscoring the region’s growing interest in SLLs. RGE’s latest SLL contributes to the growth of green finance which can unlock US$2 trillion[1] in economic growth for the GCC region by 2030. RGE’s SLL, which includes a US$150 million Murabaha term facility that is AAOIFI[2]-compliant, also marks its inaugural Islamic financing and catalyses the company’s continued strategic expansion into key regions, including the Middle East, where Apical’s local operations are witnessing exponential growth.
Patrick Tan, Head of Banking, RGE, said: “We are delighted to have the overwhelming support of our banking partners, including CBD and FAB, for our latest SLL. It is a vote of confidence in our growth and sustainability journey. The US$150 million part of the financing, which is both sustainability-linked and Islamic, is a relatively new financing structure in the industry. We hope to further strengthen our relationships with Islamic financial institutions in the Middle East to support the region’s growth in green financing.”
Abdul Rahim Al Nimer, General Manager – Corporate Banking at CBD, said: “We are pleased to announce the closure of this landmark SLL transaction which underscores the close relationship between CBD and RGE. We are proud to be a part of RGE’s journey. Leading another successful market deal is a true testament to CBD’s robust capabilities and ongoing commitment to backing our customers’ ambitions.”
Fawaz Abusneineh, Acting Head of Global Corporate Finance at FAB,said: “This marquee transaction underlines FAB’s leadership in global Islamic and sustainable financing, and the Group’s growing profile as a gateway facilitating trade and investment between the MENA and Southeast Asia regions. We look forward to continuing collaboration and to be the partner of choice for RGE’s banking requirements in the MENA.”
The Middle East is a strategic region for RGE, with Dubai acting as a gateway to increase RGE’s trade flows to the EMEA region while Singapore is the other gateway to Asia. The US$1 billion SLL will be used to support RGE’s agribusiness’ operations, growth and expansion across its diverse product offerings. It is also tied to key performance indicators (KPIs) to enhance:
- Engagement with the number of suppliers carrying out independent traceability verification
- Utilisation of energy derived from renewable and clean energy sources, and
- Collaboration with NDPE[1]-compliant suppliers.
Independently validated by a third-party sustainability consultant, the pre-agreed KPIs for the SLL have been set as a tool to help the company better align its efforts to accelerate the achievement
of its sustainability targets. In the event that the company is not able to meet the KPIs that are set as part of the agreement for the financing, it will have to pay a higher interest rate on the loan.
US$1 billion SLD:
Concurrently, to hedge interest rate risks and drive greater accountability, RGE has closed a US$1 billion SLD interest rate swap which is tied to the same KPIs as the SLL.
By embedding sustainability throughout the traceable and transparent supply chain, from cultivation to consumption, Asian Agri and Apical will enhance the value for its customers and partners, offering them environmentally and ethically sustainable products. This commitment aligns with the key actions discussed at the recently concluded COP28, where government and private sector leaders pledged to accelerating decarbonisation and pace of change.
Apart from CBD and FAB, the other MLABs are E.SUN Commercial Bank, Ltd., Hua Nan Commercial Bank, Ltd., Industrial Bank Co., Ltd, MUFG Bank, Ltd. (MUFG), Shanghai Pudong Development Bank Co, Ltd. and Bank of Communications (Hong Kong) Limited.
MUFG is the Lead Sustainable Finance Advisor on the transaction, with CBD and MUFG as Joint SLD Coordinators, and FAB as the Islamic Advisor.
As one of the largest global producers in the bioeconomy where the source material for life’s essential goods is manufactured into products used by billions of people every day, RGE is dedicated to responsible growth and expansion and has transitioned its financing to SLLs. In the year ended 2023, RGE has successfully secured in excess of US$1 billion of SLLs.
