Aluminium and alumina producer Rusal has launched what it says is Russia’s first-ever sustainability-linked syndicated facility.
The five-year, US$750mn pre-export finance facility was launched in early September and is expected to be closed by mid-October. Commitments have thus far been received for a total of US$725mn from both Russian and international banks active on the Russian syndicated loan market.
Rusal has mandated ING and Natixis as co-ordinating mandated lead arrangers and bookrunners of the facility. Natixis and Société Générale are acting as sustainability co-ordinators.
Proceeds of the facility will be used in part to refinance the principal outstanding under the existing up to US$2bn facility drawn by the company in May 2017.
Aluminium smelting is an energy-intensive business, with figures from the International Aluminium Institute showing that production of the metal accounts for about 0.8% of global greenhouse gas emissions. In 2017, Rusal unveiled its new “green” aluminium brand, Allow, which is produced using renewable energy rather than fossil fuels. According to the company, the carbon footprint of Allow products is less than four tonnes of CO2 equivalent per tonne of produced aluminium, versus the global average of 12 tonnes.
In this new facility, the margin will depend on the company’s fulfilment of key performance indicators related to environmental impacts and sustainable developments. A spokesperson for the company tells GTR that no further information about the margin levels or the indicators can be disclosed until after the syndication is closed.
“This sustainability linked pre-export finance facility is further proof that the company is at the forefront of the projects that are aimed at cutting down the world’s carbon footprint,” says Evgeni Nikitin, CEO of Rusal, in a statement. “For us this transaction is not only another important step towards the refinancing of the company’s debt optimising maturities and financing costs, but also proves the support we have for our ecological strategy from the experts in that field.”