Dubai-based Majid Al Futtaim has signed a $1.5 billion sustainability-linked loan (SLL).
The shopping malls, communities, retail and leisure giant across the Middle East, Africa and Asia secured the financial instrument primarily on environment, social and governance (ESG)-related performance.
The five-year SLL is structured as a revolving credit facility (RCF) and is the largest corporate, non-government-linked SLL in the region and the largest in the MENA real estate sector, with over a dozen banks participating in the syndicate.
In line with our ambitious sustainability strategy, the SLL aims to facilitate & support environmentally & socially sustainable economic activity & growth by incentivising ambitious, predetermined sustainability performance objectives. Read more: https://t.co/MfalrG9QdG (2/2)
— Majid Al Futtaim (@MajidAlFuttaim) August 26, 2021
Ziad Chalhoub, chief financial officer, Majid Al Futtaim Holding, said: “The signing of our first Sustainability-Linked Loan comes as a result of, and in line with, our long-term strategic targets, including the production of more energy and water than we consume, reaching a net positive business model by 2040.
“While a company’s profitability is important, how you contribute to sustainability is becoming more crucial and a filter for investors to decide how much and where they will invest. To ensure that you have access to funding – and at attractive rates – in a world where sustainability is becoming more important, it is imperative to embrace this reality now and not be left behind.”
The company’s agreement also includes a gender diversity target for women to constitute 30 percent of board members and senior management roles, aligning with the global aims of the 30 percent Club, a first for the region.
In the first half of 2021, green and sustainability-linked debt issuance in the MENA region hit $6.4bn, according to Bloomberg’s H1 2021 Capital Markets League Tables.
Banks in the region are increasing their capacity to provide green financing options, and the region’s first sustainability-linked loan to refinance existing debt was issued in March by Emirates NBD.
According to Bloomberg Intelligence’s recent Global ESG 2021 Outlook, more than $3 trillion in fiscal stimuli globally will be dedicated to financing a green recovery, while ESG assets may top $53 trillion by 2025, representing more than a third of projected total assets under management, as ETFs and debt expand.