Largest UAE retailer gains first ESG loan of $1.5bn
Loan also includes gender diversity target for women
Retail giant Majid Al Futtaim secured its first sustainability-linked loan with a value of 5.51 billion dirhams ($1.5 billion), said in a statement on Thursday.
The UAE-based retailer said the loan is part of its sustainability strategy, as it aims to facilitate and support environmentally and socially sustainable economic activity and growth.
“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,” said Ziad Chalhoub, MAF’s chief financial officer.
The five-year SLL is structured as a revolving credit facility, which MAF says is “the largest corporate, nongovernment-linked SLL in the region and the largest in the Middle East and North Africa region real estate sector,” with over a dozen banks participating in the syndicate, according to the statement.
The loan also includes a gender diversity target for women to constitute 30 percent of board members and senior management roles, it added.
An SLL is a financial instrument that supports companies’ environmental, social, and governancerelated (ESG) performance.
Standard Chartered said in a separate statement on Thursday that it acted as sole sustainability coordinator on the retailer’s inaugural $1.5 billion SLL.
Mohammed Salama, regional head of client coverage MENA, Standard Chartered Bank, said: “We are delighted to support Majid Al Futtaim in their landmark debut sustainability linked loan by acting as sole sustainability coordinator.”
Salama added: “Having structured the first-ever loan in the Middle East to incorporate sustainability-linked pricing in 2018, we are proud to have brought another pioneering facility to the market.”
Salama said: “As a regional leader in sustainable finance and given our own commitment to be net-zero across all our activities by 2050, we are committed to supporting our clients, like Majid Al Futtaim, to deliver on their sustainability objectives by structuring innovative solutions.”