Musim Mas Achieves EUR 150 million in Sustainability-Linked Financing for Palm Oil

Musim Mas has achieved a significant milestone in its sustainability journey by securing its first Sustainability-Linked Revolving Credit Facility (SLRCF). In partnership with Rabobank and HSBC, the Musim Mas Group's marketing arm, Inter-Continental Oils & Fats Pte. Ltd., and its Spain and Italy Biofuel entities have transitioned their EUR 150 million uncommitted Revolving Credit Facility (RCF) into a sustainability-linked loan. This landmark development underscores Musim Mas' unwavering commitment to sustainable business practices and its dedication to environmental and social responsibility.

Musim Mas is strategically utilizing a Sustainability-Linked Loan (SLL) to embed environmental and social sustainability into its financial framework, showcasing its commitment to responsible business practices in accordance with the LMA Sustainability-Linked Loan Principles. The SLL is structured around three Key Performance Indicators (KPIs): achieving RSPO certification for independent smallholders, providing training to these smallholders, and maintaining a deforestation-free palm oil supply chain. The annual progress on these KPIs will be externally verified by reputable assessors to ensure transparency and accountability.

The selection of these KPIs reflects careful consideration of their materiality and the ambition of the targets. Independent smallholders, who operate on smaller-scale oil palm farms, are crucial for advancing sustainable palm oil production. Improving the yield and sustainability practices of these farmers is essential, as they account for an estimated 41% of the production area. By supporting smallholders in adopting sustainable farming methods, Musim Mas aims to enhance livelihoods, promote social equity, and achieve its long-term objectives of eliminating deforestation and developing a resilient, responsible palm oil supply chain.

Gregory Vandeler, Head of Trade & Commodity Finance at Rabobank Asia, expressed pride in serving as the lead sustainability coordinator for Musim Mas's first sustainability-linked loan. He highlighted that this partnership underscores the strong, trusted relationship Rabobank has with Musim Mas, a prominent leader in sustainability within the palm oil industry. By linking sustainability performance to financing, Rabobank supports its clients' environmental goals while boosting productivity, resilience, and farmer livelihoods. Vandeler emphasized the significant potential for enhancing sustainability in the agri-food sector and reaffirmed Rabobank’s commitment to leading and collaborating with clients in their transition towards more sustainable practices.

Mr. Alvin Lim, Chief Financial Officer and Executive Director of Musim Mas, stated that securing a sustainability-linked loan with ambitious, meaningful, and measurable targets demonstrates the company's strong commitment to sustainability and responsible corporate conduct. He emphasized that this move reinforces Musim Mas' dedication to creating positive environmental and social impacts while ensuring long-term value for its stakeholders, including financial institutions, customers, and employees. By integrating these targets into their financing structure, Musim Mas is showcasing its resolve to drive significant and measurable change in its sustainability practices.

Musim Mas Group is a leading global palm oil company with operations spanning 13 countries. The company's integrated value chain includes plantations, mills, refineries, kernel-crushing plants, oleochemicals, and specialty fats plants, enabling it to produce a wide range of palm oil products and value-added derivatives.