Mashreq, a leading financial institution in the MENA region, led a groundbreaking $3.25 billion Leverage Buyout Sustainability-linked financing for GEMS Education.

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

This financing package is poised to act as a significant catalyst for ongoing advancements in integrating sustainability within the education sector. Through this inaugural Sustainability-linked facility, Mashreq supports GEMS Education in its strategic journey towards enhanced sustainability and educational excellence.

Sunny Varkey, Founder Chairman of GEMS Education, said: “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, added: “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.”

The facilities include key performance indicators (KPIs) to track ambitious sustainability performance targets (SPTs), centered around Sustainable Development Goals 4 and 7. These KPIs focus on increasing the share of renewable energy in school operations, certifying teachers in climate and environmental-related topics through the United Nations Climate Change (UNCC) program, and developing a scholarship program to ensure diversity and inclusion across schools. In addition, GEMS has committed to a long-term improvement plan targeting resource management and reporting, aligning with its goals of promoting quality and inclusive education.

On June 18, 2024, the local bank consortium, including Mashreq, provided underwriting and pre-funded the multi-billion dollar facility. In partnership with Brookfield, the syndication of banks facilitated the exit of the majority position held by existing shareholders, including CVC Capital Partners, and refinanced GEMS’ existing indebtedness. The bank facility will subsequently be syndicated in the primary loan market.

Founded by the Varkey family in 1959, GEMS Group is headquartered in Dubai and is a leading K-12 private education provider in the UAE. The group educates over 135,000 students across 61 schools in the UAE (42), Qatar (2), and Europe (17), and offers auxiliary services in school transport, facility management, catering, and school uniforms.

Mashreq’s commitment to sustainable financing is evident in its ambitious target to finance and facilitate $30 billion in sustainable financing by 2030.