Bridge

Runner Automobiles

Posted

August 2023

Sector

Transportation

SHARE

GuarantCo provides Runner Automobiles with a guarantee for BDT 2.67 billion (c. USD 27 million) to support the first internationally certified sustainability bond in Bangladesh.

Runner Automobiles

Transaction benefits

GuarantCo provided Runner Automobiles with a 100 percent guarantee for issuance of an¬†internationally certified¬†sustainability bond worth BDT 2.67 billion (c. USD 27 million). The bond aims to facilitate access to credit for borrowers who wish to own lower emitting three-wheelers including electric powered three-wheelers. Furthermore, a proportion of the bond’s proceeds will be allocated towards installing a 3.4MW greenfield rooftop solar system at the manufacturing plant.

 

This landmark achievement represents the first internationally certified sustainability bond issued by a local business in Bangladesh. The bond garnered subscriptions from local private sector institutions and insurance companies. MetLife Bangladesh is a major investor in this bond whilst Green Delta Capital acted as the lead arranger and security agent on the transaction.

Development benefits

By providing credit access, this initiative will grant an opportunity for around 7,000 drivers to become owners of three-wheelers, leading to income-generating prospects for drivers and downstream vehicle maintenance companies. It is anticipated that these three-wheelers will offer taxi services to approximately 50,000 people in rural and urban areas of Bangladesh.

 

In addition to making an employment generating product more affordable for lower-income consumers in the country, the transaction is also Paris aligned as it will facilitate the implementation of the Government of Bangladesh’s transport and climate strategy. Furthermore, the rooftop solar facility installed as a component of the transaction will significantly reduce reliance on grid and backup diesel generators, lowering the carbon footprint, and the three-wheel vehicles backed by the transaction represent an environmental improvement compared to other vehicles relying on other fossil fuels.