Sustainability trailblazers: A steel mill’s first sustainability-linked loan

The Chinese metals industry is a massive one, for which it is the largest net importer of non-ferrous metals and exporter of steel in the world. The metals sector has always been an industry that was difficult to abate for sustainable production and financing, but things are certainly changing these days, and Rabobank is proud to be a part of this transition.

As a leader in China’s steel industry and the world’s 8th largest producer, Jianlong Group is taking action to increase renewable electricity usage, reduce the intensity of freshwater consumption in its production, and up its recycled waste heating area and reduce the intensity of sulphur dioxide emissions – all key performance indicator (KPI) targets it is committed to achieving as part of the USD25-million sustainability-linked loan (SLL) that Rabobank Hong Kong acted as Sole Arranger for. These four KPIs are a testament to Jianlong Group’s dedication towards reducing emissions, against a short-term uncommitted revolver.

The SLL, which was drawn down by Jianlong Group’s wholly-owned subsidiary Jianlong (HongKong) International Trade Co Ltd, marks one of the first few sustainability-linked transactions for China’s steel industry and set adrift a wave of excitement among other clients in Greater China, and is inspiring other players to rethink sustainable financing.

Partnering with our metals and other commodities clients in their sustainability transition journeys reflects Rabobank’s long-term commitment to China’s metals sector, and to contributing our bespoke financing solutions and deep sector knowledge to all the financing solutions we create.

Sustainable development is the reality of the future, as we look to creating a better world for the generations to come. Industries like China’s metals industry are also increasingly eager to embrace sustainable development and low carbon transition, as well as helping to enable the world’s energy transition ambitions in areas like renewables, energy storage, clean mobility and smart cities, all as the country marches along to its 2050 target of net zero. This landmark transaction will go a long way towards building even more sustainable financing solutions for commodities clients and sets the stage for a more sustainable future.

Founded in 1998, Jianlong Group is China’s 5th biggest and the world’s 8th largest steelmaker, with an annual production capacity of 44 million tonnes, and its main presence in China, Singapore and Malaysia. In 2023, the Group produced 36.99 million tonnes of steel, achieved a total profit of RMB2.8 billion, and its assets totalled RMB189.7 billion. Headquartered in China’s capital city of Beijing, Jianlong Group has approximately 60,000 employees.