Jordan’s first sustainability-Linked loan

In partnership with Classic Fashion Apparel Industry Limited, Mashreq, the MENA region’s financial institution, launched Jordan’s first sustainability-linked loan (SLL), creating a new benchmark for sustainable finance in the area.

The announcement fits with Mashreq’s goal of facilitating $30 billion in sustainable financing by 2030, which demonstrates its dedication to this cause. With interest rates conditioned on achieving predetermined sustainability targets, SLLs are designed to promote sustainable economic activity and growth.

Throughout the term of the loan, Classic Fashion has committed to a series of challenging Sustainability Performance Targets (SPTs) that will be reviewed yearly. Furthermore he company’s strong sustainability approach is shown in these Key Performance Indicators (KPIs).

It plans to dramatically reduce greenhouse gas emissions by transitioning to renewable energy, focusing on solar power for production. Classic Fashion intends to save water by using innovative water reuse and recycling methods in Jordan, where water is scarce.

Classic Fashion prioritizes staff engagement and capacity-building. The Personal Advancement and Career Enhancement initiative aims to increase Jordanian workers’ skills and representation while empowering women in the workforce.

Joel Van Dusen, Mashreq’s corporate and investment banking head, said, “We are proud to extend our sustainable financing solutions to Classic Fashion,” referring to the loan’s importance in Jordan. Moreover with their proactive approach to sustainability, they set an example for local businesses and the apparel industry.

“This deal is evidence of Mashreq’s unwavering dedication to ESG and sustainable financing in the area. By closely tying loan conditions to sustainable performance, we are promoting a cause that will encourage other businesses to incorporate ESG goals into their operations, leading to real and significant advancements.

Putting money into Jordan via its citizens

The CEO of Mashreq’s investment banking and sustainable finance, Husam Abdel Al, further stated: “Our strategic collaboration with Classic Fashion goes beyond mere financing.”

“We are making sure that our shared commitment to ESG principles translates into concrete and significant outcomes by working together to develop clear sustainability targets. We hope that this loan will serve as a catalyst for a more widespread adoption of sustainable practices, establishing the standard for change across the industry.

The significance of SLLs for Jordan was further elucidated by Sanal Kumar KS, chairman and managing director of Classic Fashion: “We see this SLL from Mashreq as more than just a financial arrangement. Together, we can create a more promising future.

Given Jordan’s urgent water shortage problem and the demand for clean energy, this partnership will have significant positive environmental effects. Beyond that, though, this Mashreq loan represents our dedication to Jordan’s economy and larger community.

In addition to tackling environmental issues, we are making investments in our most precious resource, our people.

“We strive to uplift and develop thousands of our employees through dedicated training programs, ensuring that the benefits of this partnership ripple throughout the community and contribute to the sustainable growth of our country.”

Finally the fact that Classic Fashion employs 30,000 people from different nations and produces up to 500,000 items per day speaks much about their standing in the industry.