Musim Mas Announces its First Sustainable Linked Credit Facility

SINGAPORE, August 29, 2024 /PRNewswire/ — Musim Mas is proud to announce its first sustainable linked credit facility, marking a significant milestone in its commitment to sustainable business practices. In partnership with Rabobank as the sustainability coordinator and HSBC as the other lender, the commercial branch of the Musim Mas group, Inter-Continental Oils & Fat Pte. Ltd. and its Spain and Italy Biofuel entities will convert their uncommitted revolving credit facility of 150 million euros into a sustainability-linked loan.

Musim Mas strategically leverages the Sustainability Linked Loan (SLL) to seamlessly integrate environmental and social sustainability into its financial framework, thus strengthening its commitment to responsible business practices in line with the LMA Sustainability Linked Loan principles. The sustainability-linked loan will be anchored on three key performance indicators (KPIs) – RSPO certification of small independent farmers, training of small independent farmers, and maintaining a deforestation-free palm oil supply chain. External verification of Musim Mas’s annual progress will be conducted by reputable evaluators, ensuring transparency and accountability.

The selection of these key performance indicators has been carefully guided by various factors, such as materiality and level of ambition of the goals. Small independent farmers working in smaller-scale oil palm farms represent a significant opportunity to advance sustainable palm oil production. By empowering these small farmers to adopt sustainable farming methods, Musim Mas is not only improving livelihoods and promoting social equity but also moving towards its long-term goals of eliminating deforestation and promoting a resilient and responsible palm oil supply chain.

As the sustainability coordinator for the facility, Rabobank facilitated the integration of sustainability principles into the financing structure. Rabobank and HSBC are the joint lenders of the RCF.

Gregory Vandeler, Head of Trade and Commodity Finance, Rabobank Asia, stated: “Rabobank is honored to have acted as the key sustainability coordinator for Musim Mas in its first sustainability-linked loan. Partnering with Musim Mas, one of our long-standing clients and a true sustainability leader in the palm oil industry, in this inaugural agreement reflects the trust we have built with them. Linking sustainability performance to financing is a way to support our clients in meeting their sustainability commitments while enhancing productivity, resilience, and livelihoods of farmers. There is great potential to make the agri-food sector more sustainable. As a leading bank specializing in food, agriculture, and trade, we are committed to playing a leading role by working closely with our clients in their sustainable transition journey.”

Priya Kini, Head of Business Banking, HSBC Singapore, said: “We have a long-standing relationship with Musim Mas and are pleased to strengthen our support by granting them their first sustainability-linked loan. Musim Mas aims to embed ESG principles into its core business operations and financing activities, and we are delighted to assist them in achieving this. This collaboration is a clear demonstration of HSBC’s ongoing efforts to support our clients’ transition to a more sustainable future.”

This sustainability-linked loan marks a new step in Musim Mas’s commitment to integrating environmental and social considerations into its financing activities. In 2021, the company secured a green trade financing facility from a Singapore bank, with RSPO certification being a key performance indicator under the MAS Green Finance Industry Taskforce’s Green and Sustainable Trade Finance and Working Capital Framework. In 2024, Musim Mas collaborated with a leading bank to implement an innovative sustainable account with a liquidity management structure. This initiative was designed to optimize cash flows and working capital across its entities while seamlessly integrating environmental, social, and governance (ESG) considerations.

“The procurement of a sustainability-linked loan with ambitious, relevant, and measurable goals reflects Musim Mas’s deep commitment to sustainable development and responsible corporate behavior. Musim Mas reinforces to its stakeholders – financial banks, customers, and employees – its commitment to having a positive environmental and social impact while creating long-term value,” said Mr. Alvin Lim, Chief Financial Officer and Executive Director, Musim Mas.

For more information on Musim Mas, visit our website.

[1] Herdiansyah, H., Negoro, H. A., Rusdayanti, N., & Shara, S. (2020). Palm oil plantation and cultivation: Prosperity and productivity of smallholders. Perceptible Agriculture, 5(1), 617–630. The Importance of Self-Care in a Hectic World”

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