Gunvor has signed its first borrowing base facility to finance emissions trading activity in the EU.
The energy trader has secured a €240mn facility from four banks, including a €100mn accordion feature, covering all its working capital requirements for trading on the European Union Emissions Trading System (EU ETS), including derivative positions.
MUFG and Natixis are the mandated lead arrangers on the facility and are respectively documentation agent and facility and security agent.
Credit Suisse is taking part as an arranger while ING is a participant. Norton Rose Fulbright is legal counsel for the lenders.
“This new facility will serve as an important foundation for Gunvor’s growth in carbon trading in the coming years,” says Stephanie Kuhn, the trader’s head of structured trade finance business development for Emea and LatAm.
“Gunvor is pleased with the support from our banking partners as we develop our presence into this critical and maturing market to control emissions and look to expand into other ETS around the world,” she adds.
Kay Chriqui, a senior originator at Natixis, says the bank is “pleased to co-arrange this flagship deal and partner with Gunvor on its first carbon certificate financing”.
“As a leading financial institution, Natixis is firmly committed to support the energy transition and to accompany Gunvor on its journey, including with financial support to ensure liquidity for EU allowances, which are a key enabler of a cost-efficient transition to net zero,” Chriqui adds.
Gunvor has committed to trimming its scope 1 and 2 emissions, meaning those produced directly by its activities, by 40% by 2025.
Natixis and ING are also participants in Gunvor’s US$1.64bn revolving credit facility for its European trading operations.