Bahrain Steel to receive $450m sustainability-linked loan from bank consortium

Producer and global supplier of high-grade iron ore pellets, Bahrain Steel will receive a $450m sustainability-linked loan (SLL) from a consortium of banks in the region.

Aiming to incorporate sustainability within its operations, Bahrain Steel will direct proceeds from this loan towards CAPEX for constructing the world’s largest stockyard shed with rooftop solar panels, in addition to fulfilling working capital requirements.

The SLL‘s framework incentivises Bahrain Steel to exceed mandatory greenhouse gas emissions reductions, facilitating the company’s transition toward lower carbon operations.

It is also incentivising the company to roll out an adoption programme focused on climate change and environmental risks.

Aligns with Bahrain Steel’s ESG aims

Meshary Al-Judaimi, chairman of Bahrain Steel, said, “Sustainability and social responsibility are core values of Bahrain Steel.

“Our partnership with the banks signifies a major advancement in our ESG ambitions. This strategic financing enables us to accelerate our efforts toward significant carbon footprint reduction and reinforces our commitment to sustainable practices in the steel industry.”

Al-Judaimi added: “By adopting stringent KPIs, we are not only setting new standards for environmental stewardship in the industry but also accelerating the government of Bahrain’s endeavours towards a more sustainable future.

“The focus on workforce training in climate change and environmental risks underscores our dedication to creating a more informed and responsible corporate culture.”

“This SLL incorporates relevant KPIs and improvement targets, SPTs, in the facility structure.

“This approach ensures that Bahrain Steel meets the expectation of its key stakeholders, especially in the current age of conscious consumers and investors who are mindful about environmental, social, and governance practices,” said the company’s chairman.

Banks involved in the deal

Mashreq bank acted as the sole facility and sustainability coordinator. Bank ABC is serving as the facility agent, security agent, and account bank, while Ahli United Bank was appointed as the Murabaha investment agent.

Bank ABC, ENBD, and Mashreq jointly acted as mandated lead arrangers.

Arab Bank, Ahli United Bank, Gulf Bank, Kuwait Finance House, and Khaleeji Bank joined as joint lead arrangers.