Spanish multinational oil and gas company Cepsa has signed a five-year extension of its €2bn multi-currency revolving credit facility (RCF) with 18 financial institutions, modifying the financing to link it to key environmental and social indicators for the first time.
The syndicate of lenders is made up of BBVA, Banco Santander, Bank of China, Bank of America, Barclays, BNP Paribas, CaixaBank, Citi, Commerzbank, First Abu Dhabi Bank, Intesa Sanpaolo, HSBC, Mizuho, MUFG, Natixis, SMBC, Société Générale and UniCredit.
BBVA and Natixis acted as sustainability co-ordinators.
The financing is linked to two key performance indicators (KPIs) laid out in Cepsa’s 2030 carbon targets: a progressive reduction in scope 1 and 2 emissions to reach a 55% decrease in 2030 versus 2019 and a 15-20% decrease in the carbon intensity index of its energy products sales, which includes scope 1, 2 and 3. A third KPI is aligned with Cepsa’s gender diversity target for 30% of leadership positions to be held by women by 2025.
As part of the financing agreement, Cepsa and its banking syndicate have committed to donating 100% of the interest adjustment, with each party dividing such donation equally. The donation mechanism is equivalent to a virtual credit margin adjustment where the achievement of each KPI determines if the donation is borne by Cepsa, the banks or shared among Cepsa and its lenders.
For its part, Cepsa has pledged to give its 50% share of the donation to the Cepsa Foundation, which is active in developing projects dedicated to improving the environment and biodiversity, as well as to social action and promoting gender diversity. Cepsa says its lenders have also committed to channel their share of the donation through a foundation or non-profit organisation.
“Cepsa’s first sustainable KPI-linked facility shows our determination to align our sustainability and financing objectives, placing sustainability criteria at the core of our financing and investment decisions, as well as our day-to-day operations,” says Carmen de Pablo, Cepsa’s chief financial officer. “We are fully committed to transforming our business into one that is aligned with the net-zero challenge and making Cepsa a diverse and inclusive place to work. In addition, it gives us great pleasure to see that by working closely with our core relationship banks we have been able to achieve what is a unique combination in syndicated markets, by having Cepsa and its syndicated banks equally agreeing to donate 100% of the interest adjustment to environmental and social projects.”