Bapco Energies Boosts Bahrain's Financial Landscape with Inaugural ESG-Linked Interest Rate Swap

Bapco Energies, the integrated energy company leading the energy transition in the Kingdom of Bahrain, has announced the first ESG-linked Interest Rate Swap (IRS) in the Kingdom. The announcement was made by Group Chief Executive Officer of Bapco Energies, Mr. Mark Thomas during COP28 in Dubai, UAE earlier this month.

This groundbreaking financial milestone builds on Bapco Energies' recent achievement in closing the largest ESG-linked financing in the history of the Kingdom of Bahrain. 

The landmark ESG-Linked Interest Rate Swap strategically hedges a portion of Bapco Energies' interest rate exposure, correlating the hedged rate with specific sustainability-based key performance indicators (KPIs). This innovative approach supports Bapco Energies' sustainability objectives and effectively manages the risks associated with interest rates fluctuations.

Gulf International Bank (GIB) played a pivotal role in achieving this milestone, working together with Bapco Energies to integrate sustainability targets within its financing structures. The National Bank of Bahrain (NBB) acted as Hedge Coordinator for this transaction with participation from GIB.

Mr. Mark Thomas, Group Chief Executive Officer of Bapco Energies, stated, “Bapco Energies' launch of this landmark ESG-linked interest rate swap underlines our commitment to embedding ESG principles into our operations. Building on our recent publication of the sustainability-linked financing framework, which set a global benchmark for national energy companies, this marks another positive step in solidifying Bapco Energies' position as an industry leader. By incorporating sustainability-focused KPIs into our financial instruments, we are not only managing risks but also driving positive change for the Kingdom of Bahrain.”

Gulf International Bank (GIB) CEO, Jamal Al Kishi said, “GIB is pleased to have supported Bapco Energies in accelerating its sustainable finance transition strategy by executing the Kingdom’s first ESG-linked Interest Rate Swap (IRS). We believe that finance can be used as a force for good and will continue to support our clients in their transition to a more sustainable business approach.”