Trading giant Gunvor Group has clinched a second green loan as it continues to work on cutting its carbon footprint.
The company, which is also a major charterer and shipowner, said the sustainability-linked borrowing worth €450m ($506m) will support operations at its 110,000-barrel Ingolstadt refinery in Germany, which it had slated for sale in 2019.
The trader called off the disposal after profits improved.
The new financing complements a $725m green loan package agreed in 2019, which was the first by a major trader.
This cash provided a borrowing base for refining activities in the Amsterdam, Rotterdam and Antwerp area.
Over-subscribed despite pandemic
The interest rate is dependent on the company’s year-on-year improvements in multiple sustainability criteria relating to the environment, social impact and governance.
"We’re pleased to be working closely with our banking partners to find new areas of our business for sustainability-linked opportunities," said Gunvor chief financial officer Muriel Schwab.
"And despite the recent market volatility and uncertainty, it is very promising to see such strong lender support for this approach, as the Ingolstadt facility was heavily over-subscribed."
Lenders involved in the Ingolstadt deal include UniCredit Bank, DZ Bank, KfW IPEX-Bank, Bank of China, Commerzbank and First Abu Dhabi Bank.
Gunvor met its first targets under the US loan in January and renewed it for another year.
The loan's coupon was dependent on the company’s year-on-year improvements in 15 different sustainability criteria.
The group has reiterated its commitment to "energy transition".
In 2019, transition commodities like LNG and bio-fuel comprised 45% of total trading activity, up from 28% in 2018.
The company has acquired two biofuel plants and will no longer physically trade coal.
"The company is now actively measuring its CO2 footprint while devising a sustainability plan, of which financing is an important aspect," Gunvor said.
The company added it was on target to "substantially reduce" its CO2 footprint in 2020.
Gunvor said earlier this month that its trading performance remains strong across all geographies and desks, including shipping, with more than 100 vessels owned or under long-term charter.
In October, the company said it had ownership shares in 17 tankers, while the chartering arm Clearlake Shipping had more than 50 tankers on time charter.
