Apical Group, an Indonesian palm oil processor and exporter under the RGE group of companies, has secured a US$750 million sustainability-linked loan from a syndicate of lenders. This is a first for Apical, and among only a few known in the palm oil industry, where borrowing is tied to sustainability targets and performance.
The loan, issued to Apical units AAA Oils & Fats and Apical Middle East, is structured as a two-year revolving credit and four-year term loan facilities. Under the facilities, Apical is committed to meeting improvement targets for a range of environmental, social and governance (ESG) metrics, as assessed by Environmental Resources Management, a London-headquartered global provider of environmental, health, safety, risk and social issues consulting services.
The targets are based on Apical’s commitment to ensure a sustainable supply chain. Performance against the pre-determined targets will be assessed on an annual basis for the loan period, and incentives awarded accordingly. The loan will be used to finance working capital and capital expenditure requirements of Apical Group.
The loan facilities received overwhelming demand with participation from 22 banks in nine countries. Among the mandate lead arrangers and bookrunners are E.Sun Commercial Bank, First Abu Dhabi Bank, Mega International Commercial Bank, MUFG Bank, Bank Sinopac, and Taishin International Bank.