Mercon has finalised a US$450 million sustainability-linked revolving credit facility, the first in commodity trading in the US and the first coffee-only sustainability facility globally.
The company explained that the pricing of the facility is linked to sustainability initiatives measured by performance indicators. The company said it had expanded its sourcing channels, primarily by its sustainability production programme, LIFT.
LIFT, which was first implemented in Nicaragua for coffee farmers, is an integrated system of service tools including training and technical assistance on best agricultural practices, farm business management, climate-smart agriculture, socio-environmental practices in alignment with the requirements of Rainforest Alliance, support for renovation, access to capital and financial risk management and community development. Through LIFT, farmers also contribute to the Seeds for Progress Foundation to promote education in coffee growing communities.
“As a group, we are proud to be a part of this ground-breaking facility which allows us to reaffirm our commitment to source and deliver the right quality of coffee and to do so while adding value to everyone in the supply chain,” said Oscar Sevilla, Chief Executive Officer, Mercon Coffee Corporation.
Based on the progress on the sustainability performance indicators, a discount or premium may apply to the pricing on the facility. Any discount will be disbursed to a sustainability initiative or programme selected by the company, including the LIFT programme or Seeds for Progress Foundation. Any premium may also be disbursed to similar programmes sponsored by Rabobank as the Sustainability Structuring Agent and ING Capital LLC and BNP Paribas as Sustainability Coordinators. International Finance Corporation is also a Sustainability Coordinator.