SINGAPORE – Food and agri-business company, Olam International, and its wholly owned subsidiary, Olam Treasury Pte., have secured a revolving sustainability-linked credit facility (SRCF) amounting to US$250 million – the company’s third sustainability liked financing agreement in 2 years.
The quarter-billion-dollar credit facility, that is linked to the company meeting key sustainability performance indicators (KPI), consists of three tranches – a 1-year revolving sustainability-linked credit facility of US$50 million, a 2-year SRCF of US$100 million and a 3-year SRCF of US$100 million.
Olam revealed that the interest margin on the facility is linked to the achievement of sustainability KPI improvement targets and could be lower than comparable conventional loans, if those targets are met.
“This sustainability KPI linked facility is another step towards diversification of our funding mix by partnering with quality lenders who believe that Olam, as a leading force in the agricultural sector, is able to move the global sustainability agenda forward even in these challenging and uncertain times,” Olam’s Managing Director and Group CFO, N Muthukumar said.
“This facility is the third sustainability-linked loan that Olam has executed in just the last two years with the support of our banking partners and goes to the heart of our purpose of Reimagining Global Agriculture and Food Systems.”
Under the facility, Olam noted that it has identified specific KPIs that are aligned with the three purpose outcomes of the company’s sustainability strategy; prosperous farmers and food systems; thriving communities; regeneration of the living world.
The company added that the KPIs will be tracked and reported by Olam’s Corporate Responsibility & Sustainability team, with Ernst & Young performing procedures to independently assess the achievement of the KPIs.
Olam intends to use the proceeds from the facility towards general corporate purposes of the company and its subsidiaries
This is the third such Facility secured by Olam. The company announced a US$525 million sustainability KPI-linked revolving credit facility last year and Asia’s first sustainability-linked club loan of US$500 million in 2018.
Last year, the food and agribusiness company also launched the world’s first Digital Loan of US$350 million, as it continues to live out its purpose to re-imagine global agriculture and food systems.
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