Mashreq, GEMS Education Set Industry Benchmark With $3.25 Billion Sustainability-Linked Financing Initiative

Mashreq has led a significant $3.25 billion Leverage Buyout Sustainability-linked financing for GEMS Education. This initiative marks a substantial step towards integrating sustainability within the education sector.

The financing package includes key performance indicators (KPIs) to track ambitious sustainability performance targets (SPTs). These KPIs are aligned with Sustainable Development Goals 4 and 7. They focus on increasing renewable energy use in schools, certifying teachers in climate-related topics through the United Nations Climate Change program, and developing a scholarship program to ensure diversity and inclusion.

In June, Mashreq and a consortium of local banks underwrote and pre-funded the multi-billion dollar facility. This collaboration with Brookfield facilitated the exit of majority shareholders, including CVC Capital Partners, and refinanced GEMS' existing debt. The facility will be syndicated in the primary loan market.

Sunny Varkey, Founder Chairman of GEMS Education, stated: "At GEMS, sustainability is more than a core value; it is an integral part of our strategic vision. By partnering with Mashreq to secure this innovative financing structure, we can advance our sustainability objectives and align our educational offerings with global environmental standards. This collaboration enables us to provide high-quality, inclusive, and environmentally conscious education, ensuring we meet our long-term sustainability goals."

Ahmed Abdelaal, Group CEO of Mashreq, commented: "This landmark transaction not only underscores Mashreq's leadership in Sustainable Finance but also sets a new standard for the education sector. By linking financial incentives to sustainability performance, we are supporting GEMS in its commitment towards environmental and societal advancements. This strategic partnership exemplifies our commitment to fostering sustainable growth and enabling our clients in achieving their broader impact objectives."

Mashreq served as the Lead Sustainability Coordinator, Initial Mandated Lead Arranger and Bookrunner, Account Bank, Global Agent, and Conventional Facility Agent for this initiative. The banking consortium also included Dubai Islamic Bank (DIB), Abu Dhabi Commercial Bank (ADCB), and First Abu Dhabi Bank (FAB).