Russian potash producer Uralkali has signed a syndicated pre-export facility with 18 banks, which it says is the largest sustainability linked deal in Russia and the CIS.

Launched at US$1bn, the deal was oversubscribed to US$1.5bn, and closed at US$1.25bn. The company will use the proceeds to refinance its existing loans, and for general corporate purposes.

Acting as mandated lead arrangers and bookrunners on the deal were ING, Société Générale, Crédit Agricole CIB, Commerzbank, Intesa Sanpaolo, Natixis, Alfa-Bank, Russian Regional Development Bank and Sberbank.

UniCredit, Black Sea Trade and Development Bank and RCB Bank joined the facility as mandated lead arrangers.

Bank оf America, Bank Zenit and Ak Bars Bank participated as arrangers, and Deutsche Bank, OTP Bank Russia, OTP Bank plc and ICBC joined as lenders.

ING acted as the lead sustainability coordinator, facility coordinator and documentation agent, while Crédit Agricole CIB, Société Générale and Rosbank acted as sustainability coordinators. Crédit Agricole CIB also acted as facility agent and security agent.

The base interest rate is Libor plus 190 basis points with a loan maturity of five years, and this margin is linked to Uralkali meeting certain sustainability KPIs, which include both environmental issues as well as the safety performance of the company.

“Raising ESG financing is an important step in the development of the ESG strategy of the company and reflects our efforts in the development of production safety and environment protection in the regions of operation,” says Anton Vishanenko, CFO of Uralkali.

In December last year, Uralkali’s board of directors approved its new ESG strategy for the period up to 2025. Within the new framework, the company has identified 10 priority areas, which include climate change, sustainable agriculture and a responsible supply chain. Its goals include increasing the amount of production waste it utilises to 20 million tonnes, the development of a carbon management system, and decreasing the rate of high-consequence work-related injuries by 10% a year.

This is the first time the potash producer has linked its financing to its ESG performance, and it says that the upsized deal demonstrates the support for its sustainable development strategy from both international and Russian financial institutions.