Tata Communications has secured a five-year $ 250 million sustainability-linked loan (SLL) from DBS Bank, ANZ and Export Development Canada (EDC), a press release said on June 20. ANZ acted as the Lead Sustainability Coordinator for the loan, while DBS Bank and EDC were the Joint Sustainability Coordinators, the release said.
The three lenders will jointly finance a five-year USD 250 million facility under Tata Communications’ sustainability-linked loan framework.
The transaction is the first SLL for Tata Communications under the company’s new SLL framework. Through the framework, a first of its kind in the sector in India, Tata Communications intends to link its funding with key objectives such as carbon emission reduction targets (non-financial covenants) that are core and material for the company’s long-term sustainability performance, the release said.
The interest rate margin of the loan will be adjusted up or down in accordance with the progress that Tata Communications will achieve on its carbon emission reduction targets, the release added.
Such short-term targets, creating a link between the cost of banking facilities and progress achieved on key environmental milestones, are consistent with the company’s longer-term ambition to be Net Zero across its global operations by 2035.
“As a purpose-driven bank, DBS is proud to have been part of setting an industry benchmark as the Joint Sustainability Coordinator for the first Sustainability Linked Loan in this sector. It is a privilege to support Tata Communications’ sustainable financing framework, which will accelerate the company’s carbon mitigation journey towards its net-zero goals,” said Rajat Verma, Managing Director and Head, Institutional Banking Group, DBS Bank India.
“Given our deep Asian network and trusted expertise in customising responsible banking solutions across sectors, DBS Bank looks forward to enabling companies to adopt practical decarbonisation strategies to collectively shape a more sustainable future,” Verma said.
“ANZ is pleased to have played a lead role in Tata Communications’ maiden SLL. We see significant opportunities for other companies to align their financing with their environmental commitments and believe the facility will pave the way for other borrowers in India and across Asia to set robust sustainability performance targets. ANZ has a strong presence in Asia and we are well-positioned to support our clients to reduce emissions and transition to net zero,” said Stella Saris Chow, Head of Sustainable Finance, International, ANZ
Kabir Ahmed Shakir, CFO, Tata Communications said: “The pioneering transaction is a landmark step towards supporting our belief in sustainability as a value creator. We intend to drive positive change not just within our own operations but also play a leading role in sustainable finance. We are confident that this innovative financing model will pave the way for a more resilient, more responsible future for businesses of all sizes and locations.”
“As Canada’s export credit agency, EDC stands ready to support the transition to a more sustainable world and is delighted to partner with Tata Communications with their first sustainability-linked loan, amongst the first of its kind in the Indo-Pacific region. Our approach to deploy capital for sustainable activities is a key element of how we’re helping our customers achieve their climate objectives as they work towards achieving net zero emissions,” said Todd Winterhalt, Senior-Vice President of International Markets and Head of Communications and Public Affairs, EDC.
DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia, and South Asia.
ANZ’s Sustainable Finance business is recognised as a market leader across Australia, New Zealand and Asia Pacific, and has participated in 111 sustainable finance deals with a total deal size of $144 billion in FY23. ANZ is the largest bank servicing institutional and large corporate customers in its home markets of Australia and New Zealand.
Export Development Canada (EDC) is a financial Crown corporation dedicated to helping Canadian businesses make an impact at home and abroad. EDC has the financial products and knowledge Canadian companies need to confidently enter new markets, reduce financial risk and grow their business as they go from local to global.