Global agri-business firm Cofco International has secured a US$600 million ($815.54 billion) sustainability-linked revolving credit facility from Oversea-Chinese Banking Corporation (OCBC).
The facility is under the bank’s OCBC 1.5°C loan programme, and marks the first financing facility with interest rate incentives tied to Science Based Targets initiative (SBTi)-validated Forest, Land and Agriculture (FLAG) targets.
FLAG is the world’s first framework for companies in land-intensive sectors to set science-based targets that include land-based emissions reductions and removals. To align with the FLAG framework, companies must set no-deforestation commitments with targets no later than 2025, among others.
The revolving credit facility has two performance targets aligned with Cofco International’s FLAG soy and corn emissions reduction targets. This means Cofco International will qualify for interest discounts by achieving externally verified annual emissions reductions for purchased soy and corn, which will primarily come from the company’s efforts to eliminate deforestation and conversion from its soy and corn supply chains.
SBTi approved Cofco International’s emissions reduction targets in June. This confirms that the company’s near-term targets are in line with global efforts to limit warming to 1.5°C and reflect best practices under the FLAG guidance.
Cofco International is the overseas agriculture business platform of Cofco Corporation, China's largest food processor, manufacturer and trader.
See also: OCBC Bank launches new net-zero-aligned loan for corporates
Helen Song, CFO of Cofco International, says the loan facility reflects broader trends across the industry. “Sustainable financing [is] increasingly linked to emissions reduction targets, and agriculture businesses [are] increasingly setting verified targets, taking actions to meet them and reporting transparently to be held accountable.”
Elaine Lam, OCBC’s head of global corporate banking, says the transaction demonstrates Cofco’s commitment to achieving its decarbonisation ambitions. “We are pleased to support Cofco International with our OCBC 1.5°C loan — the first non-Singapore company to take up this solution — which we launched last year to incentivise corporates to set and work towards clear carbon emissions reduction targets aligned with science-based net-zero decarbonisation pathways for their sectors.”
OCBC previously participated as senior mandated lead arranger in Cofco International’s US$2.3 billion sustainability-linked loan in 2019 and as bookrunning mandated lead arranger for a US$1.6 billion sustainability-linked loan in 2022.
