By Julia Payne
LONDON (Reuters) – Global energy trader Gunvor Group has secured a $745 million loan from banks with an interest rate that depends on meeting targets to reduce pollution and improve transparency, the company said.
In what Gunvor said was the first loan of its kind, the company will receive a discount on the interest for the borrowing base facility if its sustainability targets are met but will be penalised if it severely misses them.
The savings on the interest, which are expected to total hundreds of thousands of dollars, will go to the recently launched Gunvor Foundation, a non-profit, philanthropic arm of Gunvor, the company said in a statement.
The foundation works with several international aid groups. Its biggest projects are in job creation in Tanzania and Kenya as well as eco-farming in Tanzania.
The Geneva-headquartered firm did not detail precise targets but said they were focussed on carbon dioxide emissions, waste and water management, refinery safety and transparency reporting relating to its support for the Extractive Industries Transparency Initiative (EITI).
Gunvor joined the EITI in April, the second trading house to do so after Swiss-based Trafigura.
The initiative follows an industry effort to reduce carbon emissions to a net zero by the end of the century in line with U.N.-backed goals.
The facility was arranged by Dutch bank ING.
(Reporting by Julia Payne; Editing by Dale Hudson)