Singapore, 29 August 2024 – Musim Mas is proud to announce its inaugural Sustainability-Linked Revolving Credit Facility, marking a significant step in its commitment to sustainable business practices. Partnering with Rabobank as sustainability coordinator and HSBC as other lender, the Musim Mas Group’s marketing arm, Inter-Continental Oils & Fats Pte. Ltd., and its Spain and Italy Biofuel entities will convert its EUR 150 million uncommitted Revolving Credit Facility (RCF) into a sustainability-linked loan.
Musim Mas is strategically leveraging the Sustainability-Linked Loan (SLL) to seamlessly integrate environmental and social sustainability into its financial framework, reinforcing its dedication to responsible business practices, in line with the LMA Sustainability-Linked Loan Principles. The Sustainability-Linked Loan will be anchored on three Key Performance Indicators (KPIs) – RSPO certification of independent smallholders, training of independent smallholders, and maintaining a deforestation-free palm oil supply chain. External verification of Musim Mas’ annual progress will be conducted by reputable assessors, ensuring transparency and accountability.
The selection of these KPIs was carefully driven by various factors, such as materiality and level of ambition of the targets. Independent smallholders operating on smaller-scale oil palm farms represent an important opportunity for advancing sustainable palm oil production. To sustainably increase the overall output volume of independent smallholders, who make up an estimated 41% of the production area[1], there is a need to improve the yield of these farmers. By empowering these smallholders to adopt sustainable farming methods, Musim Mas not only enhances livelihoods and promotes social equity but also advances toward its long-term goals of eliminating deforestation and fostering a resilient and responsible palm oil supply chain.
As the sustainability coordinator for the facility, Rabobank facilitated the integration of sustainability principles into the financing structure. Rabobank and HSBC serve as joint lenders for the RCF.
Gregory Vandeler, Head of Trade & Commodity Finance, Rabobank Asia, commented: “Rabobank is honoured to have acted as the lead sustainability coordinator for Musim Mas in their inaugural sustainability-linked loan. Partnering with Musim Mas – one of our longstanding clients and a true leader in sustainability in the palm oil industry – in this inaugural deal, reflects the trusted relationship we have with them. Linking sustainability performance to financing is a way to support our clients in their sustainability commitments while simultaneously enhancing productivity, resilience, and farmer livelihoods. There is great potential in making the agri-food sector more sustainable. In our role as a leading food, agriculture and trade commodity bank, we are committed to taking a leading role in working closely with our clients in their sustainable transition journeys.”
Priya Kini, Head of Commercial Banking, HSBC Singapore, said: “We have a longstanding relationship with Musim Mas, and we are glad to be able to further deepen our support with their first sustainability-linked loan. Musim Mas wants to embed ESG principles into their core business operations and financing activities, and we are pleased to help them do so. This collaboration is a clear demonstration of HSBC’s ongoing efforts to support our clients’ transition to a more sustainable future.”
This Sustainability-Linked Loan marks another step in Musim Mas’ commitment to incorporating environmental and social considerations into its financing activities. In 2021, the company secured a Green Trade Financing Facility with a Singapore bank, with RSPO certification as a key performance indicator under the Monetary Authority of Singapore (MAS)’ Green Finance Industry Taskforce’s Green and Sustainable Trade Finance and Working Capital Framework. In 2024, Musim Mas collaborated with a leading bank to implement an innovative Sustainable Account with a Liquidity Management Structure. This initiative was designed to optimize the Group’s cash flow and working capital across its entities, while seamlessly integrating environmental, social, and governance (ESG) considerations.
“Contracting a sustainability-linked loan with ambitious, meaningful, and measurable targets is a testament to Musim Mas’ deep-rooted commitment to sustainability and responsible corporate behavior. Musim Mas is reinforcing to our stakeholders—financial banks, customers, and employees—about our dedication to driving positive environmental and social impact while delivering long-term value.”, said Mr Alvin Lim, Chief Financial Officer and Executive Director, Musim Mas.
About Musim Mas
Musim Mas Group is an integrated palm oil company globally, operating in 13 countries. From plantations, mills, refineries, kernel-crushing plants, oleochemicals, and specialty fats plants, Musim Mas manufactures palm oil products and value-added derivatives. Musim Mas is one of the largest palm oil producers in the world. The Group develops innovative value-added solutions for its customers, supported by Research and Development (R&D) centers in Singapore and Indonesia. Inter-Continental Oils and Fats (ICOF), a member of Musim Mas Group, undertakes global marketing activities.
The Group is committed to sustainability and was the first company with significant operations in Indonesia to join the Roundtable on Sustainable Palm Oil (RSPO) in 2004. Committed early to emissions reductions, Musim Mas is a signatory to the Agriculture Sector Roadmap to 1.5 Degrees convened by the Tropical Forest Alliance. The roadmap aims to halt commodity-linked deforestation in line with the 1.5-degree pathway while enhancing the livelihoods of smallholder farmers and supporting the sector’s transformation toward forest-positive land-use management. In January 2024, Musim Mas announced that it will strive to achieve net zero by 2050, aligning with climate science as per the Science Based Targets Initiative (SBTi). Musim Mas also manages the most extensive independent smallholder programs in Indonesia.
About Rabobank
Rabobank was founded by Dutch farmers in 1898 on the basis of cooperative principles. Today, with over 49,000 employees in 37 countries, our international focus centers around the Food & Agri sector and vendor finance. In the Netherlands, we extend our services also to retail and commercial banking across various sectors beyond food and agri. Our mission is to grow a better world together by enabling a shift toward a more sustainable food supply chain. Our aim is to bridge the gap between “food” and” finance” by providing access to our knowledge, global network, and financing solutions. Our efforts are dedicated to addressing four critical food challenges: increasing the availability of food, improving access to food, promoting a balanced nutrition, and increasing stability of food supply chains. Measured by Tier 1 capital, Rabobank Group ranks among the world’s largest financial institutions. We hold high credit ratings from all rating agencies and are recognised by Sustainalytics as one of the top-tier best-performing banks in environmental, social, and governance (ESG matters).
About The Hongkong and Shanghai Banking Corporation Limited (HSBC)
The Hongkong and Shanghai Banking Corporation Limited is the founding member of the HSBC Group. HSBC serves customers worldwide from offices in 60 countries and territories. With assets of US$2,975bn at 30 June 2024, HSBC is one of the world’s largest banking and financial services organisations.
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Email: media@musimmas.com
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[1] Herdiansyah, H., Negoro, H. A., Rusdayanti, N., & Shara, S. (2020). Palm oil plantation and cultivation: Prosperity and productivity of smallholders. Open Agriculture, 5(1), 617–630. https://doi.org/10.1515/opag-2020-0063
