Bahrain Steel, a leading producer and global supplier of high grade iron ore pellets, has syndicated a $450 million Sustainability-Linked Loan (SLL).
This milestone transaction, spanning seven years, underscores the company’s unwavering dedication to Environmental, Social, and Governance (ESG) principles. It also highlights the collective commitment of the lending consortium toward fostering tangible environmental impacts in tandem with their clients.
The proceeds from this loan will be directed towards CAPEX for constructing the world’s largest stockyard shed with rooftop solar panels, in addition to fulfilling working capital requirements. This strategic financing initiative illustrates Bahrain Steel’s drive to incorporate sustainability within its operations.
The SLL’s framework incentivizes Bahrain Steel to exceed mandatory greenhouse gas (GHG) emissions reductions, facilitating the company’s transition toward lower carbon operations. Moreover, the SLL is incentivizing the company to roll out an adoption program focused on climate change and environmental risks, bolstering internal capacity building for a more informed and responsible corporate culture.
Mashreq acted as the sole Facility & Sustainability Coordinator, Bank ABC will be serving as the Facility Agent, Security Agent, and Account bank, while Ahli United Bank was appointed as the Murabaha Investment Agent. Bank ABC, ENBD, and Mashreq jointly acted as Mandated Lead Arrangers. Arab Bank, Ahli United Bank, Gulf Bank, Kuwait Finance House, and Khaleeji Bank joined as Joint Lead Arrangers.
Meshary Al-Judaimi Chairman Bahrain Steel
“Sustainability and social responsibility are core values of Bahrain Steel. Our partnership with the banks signifies a major advancement in our ESG ambitions. This strategic financing enables us to accelerate our efforts toward significant carbon footprint reduction and reinforces our commitment to sustainable practices in the steel industry. By adopting stringent KPIs, we are not only setting new standards for environmental stewardship in the industry but also accelerating the Government of Bahrain’s endeavors towards a more sustainable future. The focus on workforce training in climate change and environmental risks underscores our dedication to creating a more informed and responsible corporate culture.”
Group Chief Executive Officer of Mashreq, Mr. Ahmed Abdelaal, said that “At Mashreq, we are dedicated to assisting our clients on their sustainability journeys by offering them suitable sustainable financing solutions. Our sustainable financing solutions promote the integration of sustainable practices, objectives and strategies within all operational needs. This SLL incorporates relevant KPIs and improvement targets, SPTs, in the facility structure. This approach ensures that Bahrain Steel meets the expectation of its key stakeholders, especially in the current age of conscious consumers and investors who are mindful about environmental, social, and governance practices.”
