UAE’s Mashreq Bank has led a $3.25 billion Sustainability-Linked Leveraged Buyout financing for GEMS Education.
Mashreq has served as the Lead Sustainability Coordinator, Initial Mandated Lead Arranger and Bookrunner, Account Bank, Global Agent, and Conventional Facility Agent for this initiative. The banking consortium also included prominent regional banks such as Dubai Islamic Bank (DIB), Abu Dhabi Commercial Bank (ADCB), and First Abu Dhabi Bank (FAB).
Mashreq led a US$ 3.25 billion debut sustainability-linked financing for GEMS Education, a leading regional education provider. This transaction marks the region’s largest sustainability-linked financing to date, (cont) https://t.co/J4H68ngZWR pic.twitter.com/8kqmOZ27In
— Mashreq (@MashreqTweets) July 24, 2024
Driving sustainability in education
This financing package is expected to drive advancements in integrating sustainability within the education sector. Through this inaugural Sustainability-Linked facility, Mashreq supports GEMS Education in its strategic journey towards enhanced sustainability and educational excellence.
Sustainability as a core value
Sunny Varkey, founder chairman of GEMS Education, highlighted that sustainability is an integral part of their strategic vision. Additionally, by partnering with Mashreq, GEMS can advance its sustainability objectives and align its educational offerings with global environmental standards, enabling them to provide high-quality, inclusive, and environmentally conscious education.
Supporting sustainable growth
Ahmed Abdelaal, group CEO of Mashreq, stated that this landmark transaction underscores Mashreq’s leadership in Sustainable Finance and sets a new standard for the education sector. Also, by linking financial incentives to sustainability performance, Mashreq is supporting GEMS in its commitment towards environmental and societal advancements, exemplifying their commitment to fostering sustainable growth.
Ambitious sustainability targets
The facilities include Key Performance Indicators (KPIs) to track ambitious Sustainability Performance Targets (SPTs), focusing on increasing the share of renewable energy in school operations, certifying teachers in climate and environmental-related topics, and developing a scholarship program to ensure diversity and inclusion. Additionally, GEMS has committed to a long-term improvement plan targeting resource management and reporting, aligning with its goals of promoting quality and inclusive education.
Syndication and refinancing
Moreover, on June 18, 2024, the local bank consortium, including Mashreq, provided underwriting and pre-funded the multi-billion-dollar facility. In partnership with Brookfield, the syndication of banks facilitated the exit of the majority position held by existing shareholders, including CVC Capital Partners, and refinanced GEMS’ existing indebtedness. the bank facility will subsequently be syndicated in the primary loan market.
Furthermore, Mashreq’s commitment to sustainable financing is evident in its ambitious target to finance and facilitate $30 billion in sustainable financing by 2030.
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