Standard Chartered has announced that it is providing support to Majid Al Futtaim, the leading developer and developer of shopping malls, communities, retail and leisure facilities in the Middle East, Africa and Central Asia, in its role as sole sustainability coordinator for its first $1.5 billion sustainability-related loan (5 AED 51 billion) for the company, according to a primarily guaranteed financing structure that complies with the principles of environmental, social and corporate governance.
This sustainability-related financing aims to facilitate and support activities and sustainable economic growth from an environmental and social standpoint, by stimulating and activating a set of ambitious and pre-defined goals in the field of sustainability.
The Majid Al Futtaim sustainability loan is structured for a period of five years, as a revolving credit facility. In its operations more than ten banks. On the other hand, the loan financing agreement set a goal related to gender diversity, according to which women occupy 30% of the members of the board of directors and senior management positions in the group, in line with the global goals of the “30% Club” initiative, in a step considered the first of its kind in the region.
Mohamed Salama, Head of Global Banking for the Middle East and North Africa at Standard Chartered Bank, said: “We are pleased to support Majid Al Futtaim’s efforts to obtain the first sustainability-related financing, by acting as the sole sustainability coordinator for this financing. A loan of its kind ever in the Middle East incorporating a sustainability-related margin rate in 2018, we are once again proud to offer a pioneering new facility in the region.As a regional leader in sustainable finance, with a pledge to completely eliminate emissions from our activities by 2050, We affirm our commitment to support distinguished customers, such as Majid Al Futtaim, to achieve their goals in the field of sustainability, through our innovative financing solutions structures.”
Ziad Shalhoub, Chief Financial Officer of Majid Al Futtaim Holding, said: “At Majid Al Futtaim, we are keen to ensure our leadership in sustainability at the corporate level around the world, and this includes real responsibility and accountability for how we finance our operating and capital expenditures across the group. By concluding the first sustainability-related loan as a direct result of, and in line with, our long-term strategic objectives, including producing more energy and water than we consume, and reaching a “summary” business model in consumption by 2040.
Shalhoub added: “Although profitability remains a fundamental pillar of business, the contribution to sustainability has now become more important, and has turned into an assessment tool that investors can use to determine the size and location of the investment. In our world where the concepts of sustainability have become so important, it is necessary It is for us to embrace these modern principles, as well as our continuous endeavors to lead in this new reality.”
The Majid Al Futtaim Sustainability-Linked Loan is the largest of its kind in the region since the Loan Market Association (LMA) revised Declaration of Principles published in May 2021, and requires external and independent verification of annual KPIs and reports, to ensure clarity and compliance with defined sustainability goals. (SPTs). This sustainability-related financing is characterized by three specific objectives that include three key performance indicators for sustainability in each of the financing years, in line with international best practices, and it is the first loan of its kind in the region to adopt a facility subject to a “penalty only” structure, which confirms the commitment of the company. Majid Al Futtaim, to achieve real and tangible sustainability goals.
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