Olam gets US$150M loan for sustainable cotton procurement

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018.

Olam International has obtained a US$150 million financing facility tied to procuring sustainable cotton under the Better Cotton Initiative (BCI), the Singapore-listed agri-business said in a filing to SGX Wednesday.

The company said it has been actively working with BCI since its inception in 2009, and works with smallholder farmers in Africa to produce cotton more sustainably, to increase yields with better methods and to positively impact the livelihoods of farming communities.

“Olam continues to re-imagine what sustainable financing can look like through innovative, purpose-driven initiatives that have the strong support of our banking partners,” N Muthukumar, group chief financial officer of Olam, said in the statement.

“This Facility supports Olam’s procurement of sustainable cotton via the Better Cotton Initiative, while combining Olam’s operational ability, leadership position in cotton and sustainability focus with the banks’ objective of supporting more financing linked to sustainable activities,” he said.

The facility has a two-year tenor, with Natixis as the sole lender and BCI as coordinator, the filing said. Olam Treasury and Olam Global Agri Treasury will be co-borrowers, the filing said.

BCI, which works to help cotton communities thrive while protecting the environment, has membership spanning farmers, ginners, spinners, suppliers, manufacturers, brand owners, retailers, civil society organizations and governments.