Cobalt, as a pivotal metal resource, plays an essential role in the new energy domain, especially in the fabrication of electric vehicle batteries. High-performance lithium-ion batteries, a critical component of electric vehicles, indispensably incorporate cobalt.

Amidst a global consensus deepening on diminishing greenhouse gas emissions and fostering a low-carbon economy, the demand for electric vehicles and, consequently, for new energy materials such as cobalt, has witnessed rapid expansion. This trend not only propels the development of the cobalt industry and other new energy material sectors but also catalyzes their technological innovation and industrial upgrading. Concurrently, as the imperative for environmental protection and sustainable development intensifies, minimizing environmental impacts and enhancing resource utilization efficiency in the extraction and manufacturing processes of cobalt resources have increasingly garnered attention.

Recently, Standard Chartered Group successfully assisted Zhejiang Huayou Cobalt Co., Ltd. ("Huayou Cobalt") in securing its inaugural multi-currency sustainability-linked syndicated loan, with an upper limit of $300 million equivalent.

This initiative marks the first multi-currency syndicated loan in the Hong Kong market of China, denominated in US dollars, offshore RMB, and onshore RMB, aiming to optimally leverage the liquidity of both offshore and domestic RMB and enhance fund utilization efficiency.

Huayou Cobalt's Inaugural Multi-Currency Sustainability-Linked Syndicated Loan

Huayou Cobalt, a globally significant cobalt supplier, engages primarily in the research, development, and manufacturing of new energy lithium battery materials and cobalt new materials. It stands as a high-tech enterprise with an integrated industrial chain spanning from nickel-cobalt-lithium resource development to lithium battery material production, dedicated to advancing low-carbon and eco-friendly new energy lithium battery materials, holding a leading position globally in both sales volume and production capacity of new energy lithium battery materials.

As an innovator among the upstream enterprises in the global new energy vehicle industry chain, Huayou Cobalt adheres to principles of green development and environmental friendliness, aligning with Standard Chartered Group's sustainability strategy. The collaboration between the two entities has been longstanding in areas such as RMB internationalization, sustainable finance, and green finance.

In March 2022, Standard Chartered Group facilitated Huayou Cobalt's first offshore syndicated loan transaction. In May 2022, leveraging their RMB outward direct investment (ODI) and RMB/Indonesian Rupiah foreign exchange management scheme, Standard Chartered Group and Huayou Cobalt were awarded the "Best RMB Internationalization Initiative" by the esteemed financial magazine The Asset. In February 2023, Standard Chartered China extended to Huayou Cobalt its first loan compliant with Standard Chartered Group's Green and Sustainable Product Framework, also aligning with the European Union's Common Ground Taxonomy.

Throughout this multi-currency sustainability-linked syndicated loan collaboration, Standard Chartered Group served as the exclusive lead arranger and sustainable finance coordinator, leveraging its comprehensive syndicate strategy and sales network during the issuance, attracting a cohort of institutional investors from both domestic and international realms, including Chinese, Korean, European, and Middle Eastern banks, demonstrating Standard Chartered Group's formidable distribution capabilities.

This sustainable development index-linked syndicated loan, intertwined with Huayou Cobalt's green and sustainable indicators, manifests Huayou Cobalt's commitment to carbon neutrality, mitigation of climate change impacts, and emphasis on gender diversity, also showcasing Standard Chartered Group's exemplary product design and coordination prowess in the realm of green and sustainable finance. The syndicated loan further received a second-party opinion certification from ISS (Institutional Shareholder Services).

Lu Jing, Deputy Head of Standard Chartered China, Director-General of Corporate, Financial Institutions, and Commercial Banking, remarked, "Huayou Cobalt represents one of the pivotal leaders in the upstream sector of the new energy vehicle industry chain. We are exceedingly gratified to facilitate Huayou Cobalt in consummating this trailblazing transaction, incessantly bolstering Huayou Cobalt's ambitions for sustainable and low-carbon progression through our distinguished capabilities in crafting sustainable financial products and distributing capital market solutions. This transaction unequivocally underscores the immense potential of RMB as an offshore financing currency. We aspire to persist in our collaboration with Huayou Cobalt, venturing further into innovative solutions within the spheres of green and sustainable finance and RMB internationalization, thus furnishing Huayou Cobalt's global expansion with more efficacious financial backing."

Qian Xiaoping, Vice President of Huayou Cobalt Group, asserted, "This multi-currency sustainability-linked international syndicated loan not only epitomizes Huayou's pioneering endeavors in the green and sustainable financing domain but also signifies a major stride towards augmenting its international stature and constructing a green, sustainable development framework, manifesting the firm's resolute dedication to international expansion, green low-carbon progression, and sustainable development. Green finance transmutes 'green' into 'gold.' We extend our gratitude to Standard Chartered Bank for propelling Huayou's green finance development, wherein green finance empowerment will provision Huayou Cobalt with robust ' lithium battery' dynamism for high-quality development. "

In concert towards green, sculpting a sustainable future

As China steadily advances its "dual carbon" objectives, the synergy between financial institutions and corporations becomes increasingly pivotal. The collaboration between Standard Chartered Group and Huayou Cobalt not only perpetuates the long-term partnership between the two entities but also represents a tangible commitment by financial institutions to support sustainable development goals, serving as a proactive exemplar of promoting low-carbon economic and corporate transformation through sustainable finance on a global scale.

Green and sustainable finance constitutes a strategic focus for Standard Chartered Group, which, since establishing its "Sustainable Finance Department" in 2018, has been dedicated to providing comprehensive sustainable financial services to global clientele. Grounded in the United Nations Sustainable Development Goals (SDGs), Standard Chartered Group's Green and Sustainable Product Framework offers clear guidance for projects aligning with green and sustainable development principles. Standard Chartered Group pledges to mobilize $300 billion towards supporting corporate sustainable development by 2030 and aims to achieve net-zero emissions across all financing activities by 2050.

Confronting the challenges posed by global climate change necessitates collective endeavor, innovative thinking, and close collaboration across sectors to forge a greener and more sustainable future. As an advocate and practitioner in the field of sustainable finance, Standard Chartered Group, prioritizing clients' needs as the primary impetus towards achieving "dual carbon" objectives, commits to advancing alongside corporations towards a verdant horizon.