SINGAPORE, Aug. 28,
2024 /PRNewswire/ -- Musim Mas is proud to announce
its inaugural Sustainability-Linked Revolving Credit Facility,
marking a significant step in its commitment to sustainable
business practices. Partnering with Rabobank as sustainability
coordinator and HSBC as other lender, the Musim Mas Group's
marketing arm, Inter-Continental Oils & Fats Pte. Ltd., and its
Spain and Italy Biofuel entities
will convert its EUR 150 million
uncommitted Revolving Credit Facility (RCF) into a
sustainability-linked loan.
![Musim Mas Signs its first Sustainability-Linked Loan with Rabobank and HSBC Bank Musim Mas Signs its first Sustainability-Linked Loan with Rabobank and HSBC Bank](https://mma.prnewswire.com/media/2491209/Musim_Mas.jpg)
Musim Mas is strategically leveraging the Sustainability-Linked
Loan (SLL) to seamlessly integrate environmental and social
sustainability into its financial framework, reinforcing its
dedication to responsible business practices, in line with the LMA
Sustainability-Linked Loan Principles. The Sustainability-Linked
Loan will be anchored on three Key Performance Indicators (KPIs) –
RSPO certification of independent smallholders, training
of independent smallholders, and maintaining a
deforestation-free palm oil supply chain. External verification
of Musim Mas' annual progress will be conducted by reputable
assessors, ensuring transparency and accountability.
The selection of these KPIs was carefully driven by various
factors, such as materiality and level of ambition of the targets.
Independent smallholders operating on smaller-scale oil palm farms
represent an important opportunity for advancing sustainable palm
oil production. To sustainably increase the overall output volume
of independent smallholders, who make up an estimated 41% of the
production area[1], there is a need to improve the yield
of these farmers. By empowering these smallholders to adopt
sustainable farming methods, Musim Mas not only enhances
livelihoods and promotes social equity but also advances toward its
long-term goals of eliminating deforestation and fostering a
resilient and responsible palm oil supply chain.
As the sustainability coordinator for the facility, Rabobank
facilitated the integration of sustainability principles into the
financing structure. Rabobank and HSBC serve as joint lenders for
the RCF.
Gregory Vandeler, Head of Trade &
Commodity Finance, Rabobank Asia, commented: "Rabobank
is honoured to have acted as the lead sustainability coordinator
for Musim Mas in their inaugural sustainability-linked loan.
Partnering with Musim Mas - one of our longstanding clients and a
true leader in sustainability in the palm oil industry - in this
inaugural deal, reflects the trusted relationship we have with
them. Linking sustainability performance to financing is a way to
support our clients in their sustainability commitments while
simultaneously enhancing productivity, resilience, and farmer
livelihoods. There is great potential in making the agri-food
sector more sustainable. In our role as a leading food, agriculture
and trade commodity bank, we are committed to taking a leading role
in working closely with our clients in their sustainable transition
journeys."
Priya Kini, Head of
Commercial Banking, HSBC Singapore, said: "We have a
longstanding relationship with Musim Mas, and we are glad to be
able to further deepen our support with their first
sustainability-linked loan. Musim Mas wants to embed ESG principles
into their core business operations and financing activities, and
we are pleased to help them do so. This collaboration is a clear
demonstration of HSBC's ongoing efforts to support our clients'
transition to a more sustainable future."
This Sustainability-Linked Loan marks another step in Musim Mas'
commitment to incorporating environmental and social considerations
into its financing activities. In 2021, the company secured a Green
Trade Financing Facility with a Singapore bank, with RSPO certification as a
key performance indicator under the Monetary Authority of
Singapore (MAS)' Green Finance
Industry Taskforce's Green and Sustainable Trade Finance and
Working Capital Framework. In 2024, Musim Mas collaborated with a
leading bank to implement an innovative Sustainable Account with a
Liquidity Management Structure. This initiative was designed to
optimize the Group's cash flow and working capital across its
entities, while seamlessly integrating environmental, social, and
governance (ESG) considerations.
"Contracting a sustainability-linked loan with ambitious,
meaningful, and measurable targets is a testament to Musim Mas'
deep-rooted commitment to sustainability and responsible corporate
behavior. Musim Mas is reinforcing to our stakeholders—financial
banks, customers, and employees—about our dedication to driving
positive environmental and social impact while delivering long-term
value.", said Mr Alvin Lim, Chief
Financial Officer and Executive Director, Musim Mas.
For more information about Musim Mas, visit our website at this
link.
[1] Herdiansyah, H., Negoro, H. A.,
Rusdayanti, N., & Shara, S. (2020). Palm oil plantation and
cultivation: Prosperity and productivity of smallholders. Open
Agriculture, 5(1), 617–630.
https://doi.org/10.1515/opag-2020-0063
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CONTACT: Devane Sharma,
communications@musimmas.com
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SOURCE Musim Mas Holdings