Bapco Energies, the energy investment arm of the Bahraini government, has launched its sustainability-linked finance framework. The framework will enable the company to link its financing with the decarbonization goals of the Kingdom and tap into the ESG investor and lender base.
The company, which rebranded itself from ‘nogaholding’ in May this year, is no stranger to sustainability-linked financing facilities.
In May 2022, Bapco Energies secured a dual-tranche US$2.2 billion sustainability-linked facility with an Islamic financing component. The facility, which was the company’s first sustainability-linked financing effort, still holds the title of the largest sustainability-linked loan in Bahrain and the Middle East.
Early this year, the company also secured a US$200 million Islamic standby facility to supplement its existing sustainability-linked facility.
According to Bapco Energies’ group CEO, Mark Thomas, the launch of the framework underscores the company’s commitment to deliver a commercially viable energy transition to support the Kingdom’s efforts of achieving net zero by 2060.
“Disclosing our detailed and ambitious decarbonization targets makes us the first national energy company to implement this practice, setting a global benchmark in the energy sector,” Mark commented.
With its sustainability targets, Mark opines that the framework will enable Bapco Energies to contribute to both the local and global sustainability agendas.
The framework, which was developed in collaboration with Standard Chartered with the bank acting as the ESG advisor, will see Bapco Energies list its Scope 1 and 2 net emissions intensity reduction targets using 2017 as a baseline.
The company looks to reach net-zero Scope 1 and 2 emissions by 2060. It has set staggered targets to reach this goal, with the upcoming target to reduce its Scope 1 and 2 carbon emissions by 15% by 2025.
The energy company has also set targets for reducing its absolute emissions. It hopes to reduce its absolute Scope 1 and 2 emissions by 30% by 2035. It is also looking to reach net-zero Scope 3 emissions within Bahrain by 2060.
The new framework is in alignment with the International Capital Market Association’s Sustainability-Linked Bond Principles and the Loan Market Association’s Sustainability-Linked Loan Principles, as confirmed by the ISS Corporate Solution’s Second Party Opinion.