Finance institution Standard Bank has successfully syndicated a multimillion-dollar sustainability-linked debt refinancing facility for LSE- and Stock Exchange of Mauritius-listed Grit Real Estate Income Group.

The syndicated facility – aligned to Grit’s environmental, social and governance (ESG) goals – was structured and exclusively led by Standard Bank.

The sustainability-linked term loan and revolving credit facility, for up to $306-million is said to be the largest of its kind to date for sub-Saharan Africa’s (excluding South Africa) real estate sector.

Standard Bank acted as the sole mandated lead arranger and bookrunner for the transaction, which covers Grit’s assets and debt facilities in Mauritius, Mozambique, Zambia, Ghana and Senegal.

Standard Bank points out that the facility helps to create pathways to transform assets and lending structures to support Grit’s ambitious sustainability targets, ensuring Grit’s ability to scale and diversify funding structures and creating a template structure that could be implemented across the rest of Grit’s portfolio.

This is noted to have made Grit’s loan management processes more streamlined and efficient, giving Grit’s management greater time to focus on its other core strategic activities.

Grit says in a statement that the refinancing ensures that its debt structures have longer tenors and are more efficient, flexible and optimally priced.

Seven existing debt exposures are being consolidated into the single sustainability-linked cross-collateralised facility, streamlining Grit’s loan management process, and creating scalable solutions for the future.

The facility is linked to Grit’s carbon emission reduction and gender equality targets, creating financial incentives to transform assets and to deliver further enhanced positive impact investments.

As at December 31, 2021, Grit had a total of $409.2-million in outstanding debt, made up of $362.9-million reported and $46.2-million held within its associates.

The new facility replaces $279.1-million of existing debt and secures additional funding earmarked for the Club Med Senegal redevelopment project.

Grit says the refinancing has enjoyed strong support from its existing senior lenders, including Standard Bank, ABSA Group and Nedbank Group, which have upsized their participation in the syndication and replaced the Bank of China’s $76.4-million Zambian facility (as at December 31, 2021), which is now being fully repaid.

“We are pleased to lead and structure Grit’s sustainability-linked syndicated debt facility, underlining our support and confidence of Grit’s business and growth strategy and potential.

“This further diversifies Grit’s funding by providing access to attractively priced, efficient and flexible debt facilities, which also increase the average maturity of Grit’s debt while creating scale in the financing of African real estate and balancing risk profile,” says Standard Bank Africa Real Estate Finance head Niyi Adeleye.

Standard Bank says sustainability-linked loans tie the terms of funding to ESG outcomes to support and incentivise responsible corporate behaviour and the creation of shared values.

The loan terms are, therefore, focused on enabling Grit to make positive environmental, economic and social changes to how it conducts its business.

“Our debt refinance brings enhanced scale, diversification, tenor and optimal funding costs to our broader debt portfolio.

“By refinancing almost all our existing debt exposures into a single sustainability-linked facility, we are streamlining our loan management process and bolstering our commitment to our ESG targets, including carbon emission reduction and gender equality,” comments Grit CEO Bronwyn Knight.

The transaction is expected to be finalised by the end of this month.