August 27, 2024
New Delhi, India
UltraTech Cement
UltraTech Cement, India’s largest cement producer, announced on Monday that it has successfully raised $500 million through a sustainability-linked loan. This marks the company’s second sustainability-linked financing initiative, following its inaugural bond issuance in 2021.
Key Highlights:
- Transaction Details:
The $500 million loan was secured with participation from six banks, including Sumitomo Mitsui Banking Corporation (SMBC), State Bank of India (SBI), BNP Paribas, DBS Bank, MUFG Bank, and Mizuho Bank. SMBC acted as the sole Sustainability Coordinator and advisor for the transaction. - Sustainability Goals:
The financing aligns with UltraTech’s commitment to sustainability and Environmental, Social, and Governance (ESG) goals. The Sustainability Performance Targets (SPTs) set by the company include:- A 27% reduction in Scope 1 emissions per ton of cementitious material by March 31, 2032, from a FY17 baseline.
- An increase in the share of green energy—sourced from waste heat recovery systems (WHRS), solar, and wind power—to 85% by FY30 and 100% by FY50.
- Current Emissions Data:
As per UltraTech’s FY24 sustainability report, the combined intensity of Scope 1 and Scope 2 emissions remains unchanged at 618.17 kg CO2e/tonne.
Industry Context: As India advances towards its ambitious climate goals, the cement industry, known for its significant carbon emissions, faces growing pressure to decarbonize. Clinker, the primary raw material in cement production, accounts for nearly 90% of the industry’s total CO2 emissions (Scope 1 and 2). Of these emissions, approximately 40% come from burning fossil fuels, 50% are process-related, and the remaining 10% stem from electricity use.
UltraTech Cement’s successful raising of $500 million through a sustainability-linked loan underscores its ongoing commitment to sustainability and reducing carbon emissions. By setting ambitious targets for emission reductions and increasing the use of green energy, UltraTech is aligning its financial strategy with its long-term ESG objectives, contributing to the broader efforts to decarbonize India’s cement industry.
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