Gunvor has renewed its US$725mn sustainability-linked facility for another year, after meeting commitments relating to its performance on the environment, social impact and governance.

The original deal, signed in late 2018, was the first of its kind for an energy commodity trader. It included a discounted interest rate if the company met targets on areas including reductions in CO2 emissions, waste and water management, improvements to personnel safety at refineries, and transparency reporting related to feedstock origination.

PriceWaterhouseCoopers served as an independent auditor of Gunvor’s performance, confirming that all targets have been met. “We’re proud to have lived up to the challenge set forth by this innovative financing, which Gunvor created with ING Bank,” says Muriel Schwab, Gunvor’s CFO.

Gunvor says that it will put the savings gained from the lower interest rate towards its not-for-profit arm, Gunvor Foundation, which provides scholarships, grants and donations for initiatives that contribute to community health, poverty reduction and the environment.

Both the original deal and the renewal were arranged by ING, which acted as sole co-ordinator and active bookrunner, as well as security and facility agent and fronting bank.

Participating banks include ABN Amro, CA Indosuez, Credit Suisse, DBS Bank, KfW Ipex-Bank, Mizuho, MUFG Bank, Nedbank, Rabobank, Raiffeisen, Société Générale, Sumitomo Mitsui Trust Bank and UniCredit.

As before, the funds from the renewed deal will be used to cover the working capital requirements of the company’s Antwerp and Rotterdam refineries.

The company is now pledging to tie more of its financing to sustainability targets, says Schwab, adding that Gunvor is currently exploring other areas of its operations where it can undertake green or sustainability-linked deals: “There is a lot the trading industry can do in terms of sustainability and the energy transition, and it is a focus of ours.”