OLAM: Sustainability-linked credit facility
“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.”
Sunny Verghese, Co-Founder and Group Chief Executive Officer
Credit Facility brief
| $500 million |
| Three year term |
| Lower interest rates tied to sustainability targets |
What?
Olam International is a leading food and agri-business supplying food, ingredients, feed and fibre to over 19,800 customers worldwide. Its value chain spans over 60 countries and includes farming, processing and distribution operations, as well as a sourcing network of an estimated 4.8 million farmers.
Olam recently secured Asia’s first sustainability-linked club loan facility of US$500m, which links the interest rate on the loan to achieving clear sustainability targets.
Why?
As an agri-business, Olam is acutely aware that the world needs increased agriculture production for a growing population without over-extending the earth’s capacity to provide. There is a clear business benefit to having a sustainable business model.
This financing is aligned with Olam’s strategy of putting sustainability at the heart of its business. It also demonstrates how sustainable companies can become more successful, ‘doing good’ and ‘doing well’ at the same time.
How?
Under the facility, Olam is committed to meeting improvement targets for a comprehensive range of environmental, social and governance (ESG) metrics, which will be independently assessed. The metrics are tested on an annual basis and if the pre-set improvement targets are achieved, the interest rate on the facility will subsequently be reduced.
Olam has appointed 15 banks to provide the facility in equal parts, with ING as the sustainability coordinator.
