Glencore-Indonesia JV eyeing US$1b sustainability-linked loan: sources

A JOINT venture (JV) between commodity trader Glencore and Indonesia’s Chandra Asri Pacific is marketing a US$1 billion sustainability-linked syndicated loan, according to people familiar with the matter, as the appeal of ESG-related financing expands in the region.

DBS and OCBC are the arrangers of the facility, which has an average life of 6.3 years, the people said, who asked not to be named discussing private matters. Aster Chemicals & Energy, a new entity under the JV called CAPGC, is the borrower, the people added.

CAPGC, which is purchasing Shell’s Singapore-based refinery business, is majority-owned and operated by Chandra Asri, while Glencore owns a minority stake through subsidiary companies, according to the Indonesian firm’s website.  Glencore declined to comment, while Chandra Asri did not respond to a request for comment.

Asia-Pacific companies are increasingly incorporating environmental, social and governance-linked elements into their financing as they look to boost decarbonisation efforts. Borrowers in Asia-Pacific outside Japan raised US$66.5 billion of sustainability-linked loans in 2024, a 37 per cent jump from the year prior, according to Bloomberg-compiled data.

The loan for Aster Chemicals & Energy pays an interest margin of 188 basis points over the risk-free Secured Overnight Financing Rate, the people said, adding that proceeds are for general corporate purposes.

Last May, CAPGC agreed to purchase Shell Singapore’s interest in Shell Energy & Chemicals Park Singapore, which comprises refining and chemical assets on Bukom and Jurong islands.