Majid Al Futtaim becomes first to get $1.5 billion Sustainability Linked Loan in MENA
Mita Srinivasan
10x Industry

Majid Al Futtaim becomes first to get $1.5 billion Sustainability Linked Loan in MENA

The loan makes Majid Al Futtaim the first privately-owned Dubai corporation to borrow via this type of innovative facility, the first and only "penalty-only" loan structure in the region, with clear targets for each year of the loan

Majid Al Futtaim, operating shopping malls, communities, retail and leisure pioneer across the Middle East, Africa and Asia, gets Standard Chartered’s support for the retailer’s inaugural $1.5 billion Sustainability Linked Loan (SLL), a financial instrument secured primarily on environmental, social and governance (ESG) related performance.

Majid Al Futtaim's five-year SLL is structured as a revolving credit facility (RCF) and is the largest corporate, non-government-linked SLL in the region and the largest in the MENA real estate sector, with over a dozen banks participating in the syndicate. The Company's agreement also includes a gender diversity target for women to constitute 30 percent of board members and senior management roles, aligning with the global aims of the 30 Percent Club, a first for the region.

Majid Al Futtaim's SLL is also the largest in the region since the updated principles of the Loan Market Association (LMA) were published in May 2021, requiring independent, external verification of annual KPI performance reporting to ensure clarity and compliance against specific sustainability performance targets (SPTs). This SLL has clear SPTs across three KPIs for each year of the loan, in line with global best practice and is the region's first and only "penalty-only" facility, demonstrating Majid Al Futtaim's commitment to achieving real, tangible sustainability targets.

Ziad Chalhoub, Chief Financial Officer, Majid Al Futtaim Holding, said: "Majid Al Futtaim continually strives to become one of the most sustainably considerate companies in the world, and this extends to genuine accountability in how we finance our operational and capital expenditures across the Group. The signing of our first sustainability-linked loan comes as a result of, and in line with, our long-term strategic targets, including the production of more energy and water than we consume, reaching a Net Positive business model by 2040.”

Standard Chartered has enacted several business targets to achieve its commitment to supporting its clients as they transition to a low-carbon economy including to provide, by the end of 2024, $40 billion of project financing services for infrastructure that promotes sustainable development, as well as $35 billion of project financing services, M&A advisory and debt structuring services for renewables and clean-tech projects (solar and wind). The Bank also recently unveiled its Sustainable Trade Finance Proposition across Asia, Africa and the Middle East, Europe and the Americas, which is designed to help companies implement more sustainable practices across their ecosystems and build more resilient supply chains.