Gunvor Group, a leading global physical energy trading company, has signed a new uncommitted borrowing base facility (the “Facility”) to support trading activities on the European Union Emissions Trading System (EU ETS). The Facility, which includes a EUR 100 million accordion feature, is scalable and secured, and will cover all working capital requirements from purchase-to-sale of EU allowances, including the associated derivative positions.
“This new Facility will serve as an important foundation for Gunvor’s growth in carbon trading in the coming years,” said Stephanie Kuhn, Gunvor’s Head of STF Business Development EMEA & Latam. “Gunvor is pleased with the support from our banking partners as we develop our presence into this critical and maturing market to control emissions and look to expand into other ETS around the world.”
For its part, Gunvor has already committed to reducing Scope 1 and 2 emissions by 40% by 2025. The company annually reports its emissions, including the most relevant Scope 3 categories.
MUFG and Natixis CIB served as Mandated Lead Arrangers, respectively acting as Documentation Agent and Facility & Security Agent of the Facility. Credit Suisse served as Arranger and ING joins as Participant. Norton Rose Fulbright acted as legal advisor for the lenders.
“MUFG is delighted to support Gunvor on this landmark transaction dedicated exclusively to financing the trading activity of EU Allowances. With the global race to Net Zero in focus, trading and monetisation of carbon permits has taken centre stage, with this Facility making its mark as a ground-breaker,” said Sandie Hessing, Managing Director, Head of Origination – EMEA Structured Trade Finance at MUFG.
Kay Chriqui, Senior Originator at Natixis, added: “We are pleased to co-arrange this flagship deal and partner with Gunvor on its first carbon certificate financing. As a leading financial institution, Natixis is firmly committed to support the Energy Transition and to accompany Gunvor on its journey, including with financial support to ensure liquidity for EU Allowances, which are a key enabler of a cost-efficient transition to Net Zero.”