Singapore-headquartered Royal Golden Eagle (RGE), a group of resource-based manufacturing companies with global operations, has secured its first-ever Islamic sustainable banking facility on the 24th January 2024 as part of a three-year US$1 billion sustainability-linked loan (SLL).
The syndicated facility, which will finance its agribusiness’s operations and expansions, was jointly coordinated by the Commercial Bank of Dubai and MUFG Bank and includes a US$150 million Murabahah term facility.
“The inaugural sustainability-linked Islamic financing further strengthens our relationships with Islamic financial institutions in the Middle East and shows our continued support for the region’s growth in green financing,” Patrick Tan, the head of banking at RGE, commented.
With First Abu Dhabi Bank as the Islamic advisor for the deal, the AAOIFI-compliant Islamic tranche is envisioned as a catalyst for RGE’s expansions in the Middle East, which has experienced ‘exponential growth’.
The proceeds from the sustainable facility will be channeled toward RGE’s sustainable agribusiness group, which consists of Asian Agri and Apical.
Asian Agri is one of Indonesia’s largest palm oil producers managing 100,000 hectares of plantation land. All of its business units are certified with the Indonesian government’s national sustainability certification scheme for palm oil.
Apical is a vegetable oil producer with operations in Indonesia, China and Spain. It is also present in India, Pakistan, the Philippines, Vietnam, Myanmar, Brazil, Dubai and the US through its joint ventures.
The SLL has three performing indicators impacting the pricing structure of the facility. These are engagement with the number of suppliers carrying out independent traceability verification, the utilization of energy derived from renewable and clean energy sources and, lastly, collaboration with NDPE [no deforestation, no peat, no exploitation]-compliant suppliers.
The US$1 billion facility saw the Commercial Bank of Dubai, E.SUN Commercial Bank, First Abu Dhabi Bank, Hua Nan Commercial Bank, Industrial Bank, MUFG Bank, Shanghai Pudong Development Bank and Bank of Communications (Hong Kong) act as mandated lead arrangers and bookrunners.
The RGE Islamic sustainable finance debut follows its inaugural US$550 million conventional sustainability-linked derivatives facility with MUFG Bank in February 2023. Back in November 2022, RGE secured its first SLL facility, a US$787 million syndicated financing facility from a consortium of banks including MUFG Bank, First Abu Dhabi Bank, National Bank of Kuwait and Chang Hwa Bank.