(LONDON – 19 January 2023) Pegasus Airlines closed the first ever sustainability-linked aircraft-secured term loan (“SLL”), which was guaranteed by UK Export Finance for the financing of ten new Airbus A321neo aircraft.

The transaction was led by Societe Generale, acting as global arranger, sustainability structurer, facility agent and security trustee. The highly innovative transaction is remarkable in several respects: it is the first-ever aircraft export credit facility incorporating sustainability-linked features, as well as the largest aircraft-secured sustainability-linked term loan executed in the market to date and the first one to be verified by a Second Party Opinion provided by an independent ESG ratings and analytics agency.

The terms of the financing are indexed on Pegasus Airlines’ future achievements in respect of two ambitious sustainability-linked Key Performance Indicators (KPIs): carbon intensity of flights and gender diversity in management positions.

Pegasus Airlines, which has pledged to reach net zero emissions by 2050, will reach its environmental targets through fleet optimization, operations efficiency, and sustainable aviation fuels usage. To reach its gender diversity objectives, the airline will leverage on and further strengthen long- standing commitments in promoting gender balance.

"We are proud to have pioneered this ground-breaking deal”

Barbaros Kubatoğlu, Deputy Chief Financial Officer of Pegasus Airlines, expressed that they have set ambitious targets to reduce carbon emissions by 2030 while increasing the representation of women in management level positions: "We are happy to have closed this landmark deal with Societe Generale. We are also pleased to include the sustainability link in an Ex-Im backed loan with the approval of UK Export Finance.  With this loan, we reaffirm our commitment to our long-term goals on carbon emissions and gender equality." Mr Kubatoğlu also said: "It was particularly important for us to address both environmental and social initiatives with this loan, which is the first of its kind. We are proud to have pioneered this ground-breaking deal, while honouring our sustainability and social commitments."

Yann Sonnallier, Global Head of Aviation Finance at Societe Generale, comments: “Societe Generale is proud to be Pegasus Airlines’ and UK Export Finance’s partner on this landmark transaction. We are pleased to have supported Pegasus Airlines with its ambitious environmental and social development strategy, thereby contributing to the decarbonization and sustainable growth of the industry.”