Neutral Capital Finance PLC was incorporated in the United Kingdom for the sole purpose of issuing debt for Neutral Fuels’ projects. The $250m MTN Bond Programme has issued two bonds to date.
Neutral Capital Finance PLC 7.25% 2026
7.25% per annum, paid semi-annually
Senior Secured Debt under English Law and UAE Law
SERIES ISSUE SIZE
Up to US$50m
26 April 2021
Cayman Stock Exchange/Frankfurt (Open Market)
The Series Two Bond has been verified by Sustainalytics, a Morningstar company that provides ESG research, ratings and data to support global investors with the development and implementation of responsible investment strategies.
Neutral Capital Finance PLC 8.25% 2024
8.25% per annum, paid quarterly
Senior Secured Debt under English Law and UAE Law
SERIES ISSUE SIZE
Up to US$12m
12 April 2019
Euronext Dublin/Frankfurt (Open Market)
May 2021: Green Bonds Update - 14:00:16 28 May 2021 - IRSH News article | London Stock Exchange
April 2021: Increased Programme Limit & Issue of Green Bonds - 18:24:43 26 Apr 2021- IRSH News article | London Stock Exchange
April 2021: Coupon Payment Announcement - 12:31:53 12 Apr 2021 - IRSH Newsarticle | London Stock Exchange
January 2021: Coupon Payment Announcement - 17:35:07 12 Jan 2021 - IRSH News article | London Stock Exchange
October 2020: Coupon Payment Announcement - 11:30:33 13 Oct 2020 - News article | London Stock Exchange
July 2020: Coupon Payment Announcement - 15:27:33 13 Jul 2020 - News article | London Stock Exchange
April 2020: Coupon payment announcement - 07:00:03 08 Apr 2020 - News article | London Stock Exchange
January 2020: Payment of Coupon - 11:22:10 13 Jan 2020 - News article | London Stock Exchange
October 2019: Coupon Payment Announcement - 12:12:55 14 Oct 2019 - News article | London Stock Exchange
Neutral Fuels is the largest producer and dispenser of biofuel in the Gulf region, and is one of the most technologically advanced biofuels companies in the world. Headquartered in Dubai, they currently operate biofuel facilities in Dubai, Abu Dhabi, Bahrain and Delhi. Neutral Fuels uses bespoke patent-pending technology and equipment to produce biofuel in an end-to-end process, from oil collection and biofuel production to fuel dispensing.
Neutral Fuels’ biofuel meets the European EN 14214 standard. It is made from locally-sourced ISCC-certified waste cooking oil.
Neutral Fuels partners with the local supply chain to implement an advanced closed loop waste-to-fuel system that is fully auditable, trackable, and supports their environmental and sustainability goals which are shared by their clients, local governments and the United Nations.
The energy world is steadily becoming more distributed, digital, and decarbonised. Neutral Fuels supports the circular economy with their local/local/local strategy. They source local waste oil, produce biodiesel locally, and dispense it for the local commercial transportation market. Their end-to-end equipment and processes are enhanced with technology and robust digital assets that enable paperless operations and a fully auditable waste-to-energy stream. Neutral Fuels’ biofuel emits 83.6 % less CO₂e compared with mineral diesel. Source : Etacarinae S.r.l., Milan, Italy 2019, 2020
Neutral Fuels actively supports the United Nations Sustainable Development Goals (SDGs), helping to achieve them via their products, solutions and technologies, in particular:
Good Health and Well-being (SDG 3): Re-using waste cooking oil can cause serious health problems. Neutral Fuels’ fully auditable waste collection system keeps waste cooking oil out of the food chain.
Affordable and Clean Energy (SDG 7): Neutral Fuels’ biofuel is sold at a price that is competitive with mineral diesel, and it does not require modifications to standard diesel engines.
Industry Innovation and Infrastructure (SDG 9): Neutral Fuels’ end-to-end closed loop system includes award-winning oil collection containers supported by a mobile app. Their production process, developed over a decade, includes patent-pending processes and equipment. They have an entire circular economy infrastructure in place for oil collection, converting waste cooking oil to biofuel, and then dispensing it to end users.
Sustainable Cities and Communities (SDG 11): Neutral Fuels’ expansion strategy is underpinned by their local/local/local philosophy. They collect waste cooking oil from the local economy, transform it into biofuel in their local factory, and dispense the biofuel to local customers.
Climate Action (SDG 13): Neutral Fuels’ biofuel emits 83.6 % le ss CO₂e compared to mineral diesel.
Source : Etacarinae S.r.l., Milan, Italy 2019, 2020
Neutral Capital Finance PLC has established this Green Bond Framework, under which the company has issued a second series Green Bond (on 26th April 2021), to finance or refinance projects promoting environmental progress.
The International Capital Markets Association (ICMA) Green Bond Principles are a set of voluntary guidelines that recommend transparency and disclosure and promote integrity in the development of green financing instruments. The Neutral Fuels Green Bond Framework follows the ICMA Green Bond Principles (GBP) 2018, which provides guidelines in the form of four core components:
Use of Proceeds
Process for Project Evaluation and Selection
Management of Proceeds
The Framework may be subsequently revised or updated as the gre en finance market continues to evolve.
The proceeds of Neutral Capital Finance PLC’s (the “Issuer”) second series Green Bond will be exclusively used to finance and/or refinance with a lookback period up to 36 months (in whole or in part, new or existing) Eligible Green Projects from any of the defined Eligible Green Project categories below:
Category 1: Clean transportation
Category 2: Eco-efficient and/or circular economy adapted products, production technologies and processes
The proceeds will be loaned from the Issuer to Neutral Fuels Overseas Holdings Ltd (the “Borrower”). The Borrower was incorporated for the sole purpose of borrowing from the Issuer under a secured loan agreement and will on-lend the proceeds to the Eligible Green Projects via ProjectCos in multiple jurisdictions to meet the Neutral Fuels local/local/local strategy. The proceeds will be used by each ProjectCo to:
finance the planning, construction, equipping and management of local biofuel facilities in 16 major cities (in emerging and developing countries);
refinance existing green debt; and
pay the costs associated with the issuance and distribution of the Green Bond.
The Green Bond is asset-backed and will afford Bondholders Senior Secured status by providing security over biofuel
facilities and their associated assets, as well as the ProjectCos’ shares, bank accounts and contractual receivables. The
Issuer’s security is governed by and enforceable under English Law with security in all other jurisdictions pledged to the
trustee under the secure trust structure, governed by the local law of the ProjectCos. All Neutral Fuels’ Eligible Green
Projects are 100% eligible to Green Bond.
Eco-efficient and/or circular economy adapted products, production technologies and processes.
Capital expenditure for waste cooking oil collection, tracking, transportation, and all related equipment ,vehicles, certifications, sensors, and activities. Financed vehicles will be electric or run on biodiesel or biodiese lblends, with an emission threshold of 25gCO₂/t-km. Certifications include ISCC for oil collection.
Transition to a Circular Economy: Prevents orreduces waste generation, supports high quality recycling of waste, prolongs the use of products, increases the development of the waste management infrastructure, avoids dangerous or irresponsible disposal of waste.
Transition to a Circular Economy: Prevents or reduces waste generation, supports high quality recycling of waste, prolongs the use of products, increases the development of the waste management infrastructure, avoids dangerous or irresponsible disposal of waste.
Climate Change Mitigation: Increases clean or climate-neutral mobility
Pollution Prevention and Control: Improves levels of air quality in areas of economic activity.
Projects financed and/or refinanced through the Green Bond proceeds under this Framework are evaluated and selected based on compliance with the Green Bond Eligibility Criteria, aligned with Neutral Fuels’ strategic environmental and sustainability objectives and in compliance with applicable national laws and regulations.
The process of evaluating and selecting eligible projects and allocating Green Bond proceeds to eligible projects comprises the following steps:
Neutral Fuels, supported by the applicable sustainability experts (as required), shall evaluate potential eligible projects, their compliance with the categories described above, and their environmental benefits according to Neutral Fuels’ investment criteria.
The findings and recommendations shall be documented and presented to Neutral Fuels’ investment team and will be used as part of the investment criteria. The final investment decision will be made in the relevant forum according to Neutral Fuels’ authority and decision matrix.
A consensus decision by the relevant decision forum according to the authority matrix is required to approve eligible projects before any allocation of proceeds from the Green Bonds. The investment team will include the Company’s CEO, CFO and COO when deciding to invest into new eligible projects.
Decisions by the board of directors, or another relevant decision maker according to the authority matrix, will be properly documented.
The decision forum will also be responsible for the following activities:
Review, select, validate and monitor the pool of Eligible Green Projects, based on sustainable policy, enterprise risk valuation and the Green Financing Framework.
Identify the proper impact metric that best describes the environmental benefits.
Draft, verify and validate annual reporting for investors.
Monitor the on-going evolution towards Sustainable Capital Markets in terms of disclosure/reporting in order to be in line with market best practices.
Review the Framework to reflect any changes involving the Company’s sustainability strategies and initiatives.
Neutral Fuels intends to allocate the proceeds from the Green Bond to Eligible Green Projects, selected in accordance with the Use of Proceeds criteria and Evaluation and Selection Process presented above. These consist of new and/or existing biofuel facilities (may be refinanced). Their Finance Department, supported by the Chief Operating Officer, will be responsible for allocation of the bond proceeds.
Neutral Fuels will strive, after adjustments for intervening circumstances including, but not limited to, refinancing existing Neutral Fuels Green debt, to fully allocate proceeds to Eligible Green Projects within 36 months from issuance.
Pending the full allocation to Eligible Green Projects, Neutral Fuels will hold and/or invest the balance of net proceeds at its own discretion into cash or cash equivalents (e.g., money market funds).
The GBPs require Green Bond issuers to provide information on the allocation of proceeds and recommend communicating on the expected impact of the projects.
Neutral Fuels will produce and keep readily available reporting on the allocation of net proceeds to the Eligible Green Projects and, wherever feasible, reporting on the impact of the Eligible Green Projects, at least at the project level, after a year from the issuance of the applicable Green Bond, to be renewed annually until full allocation of the Green Bond net proceeds. Any material developments, such as modification of the Framework or allocation portfolio, will be reported in a timely manner. The reporting will be via market announcements (published via London Stock Market’s RNS service), with each announcement filed on Neutral Fuels’ website (Investors page).
The allocation report will provide:
the total amount of investments and expenditures in the Eligible Green Projects;
the amount and/or percentage of new and existing projects (share of financing and refinancing);
the date of investment/disbursement; and
the balance of unallocated proceeds.
Where feasible, Neutral Fuels intends to report on the environmental impacts of the projects funded with the Green Bond proceeds by way of its existing Sustainability Report and/or specific impact reports.
Potential indicators are listed below:
Annual reduced mineral diesel consumption (liters)
Annual gross GHG emissions avoided/reduced (tCO₂e)
Energy Recovery from Waste:
Annual waste diverted from the waste stream (kg)
These indicators may be supplemented by qualitative and/or case study reports on outcomes and impacts of the projects funded. Where relevant, information may be provided on data reporting and impact assessment methodologies to increase transparency.
Neutral Fuels intends to align, on a best effort basis, the reporting with the portfolio approach described in "Green Bonds - Working Towards a Harmonized Framework for Impact Reporting (April 2020)”.
This Green Bond Framework has been externally reviewed by Sustainalytics.