India’s L&T & Japan’s SMBC Conclude $107 Mn Sustainability Linked Loan

A Japanese multinational banking and financial services institution, Sumitomo Mitsui Banking Corporation (SMBC), and India’s multinational conglomerate company Larsen & Toubro Limited (L&T) recently successfully finalised a three-year, $107 million sustainability-linked loan. SMBC was the sustainability coordinator and lender.

In a statement, L&T noted that its continuous dedication to its environmental, social, and governance (ESG) goals are demonstrated by this sustainability-linked loan.

The facility includes interest rate reductions based on achieving two of L&T’s preset sustainability targets: lowering the intensity of greenhouse gas emissions and the intensity of water consumption relative to the target levels.

“These targets have been chosen on the premise that they are pertinent and significant to the company’s overarching sustainability posture and strategy,” the statement continued. The loan complied with the Sustainability Linked Loan Principles’ (SLLP) fundamental standards, and DNV Business Assurance Singapore gave a Second Party Opinion on L&T’s SLLP.

R Shankar Raman, Group CFO and Whole-Time Director of L&T, commented on SLL’s successful closure by saying, “L&T continues to focus on reaching Water Neutrality by 2035 and Carbon Neutrality by 2040. The ESG roadmap towards this objective is also explicitly outlined in our long-term strategic plan. This SLL deal with SMBC marks a significant turning point in that journey and demonstrates our commitment to the ESG market.”

According to Toshitake Funaki, CEO of SMBC India, “This transaction supports SMBC Group’s initiatives to use its financial services to support a sustainable society. We are honored to serve as this SLL facility’s sustainability coordinator and lender for our main client, L&T.

Recently, L&T selected LONGi to supply 1292 MW of PV modules for two solar power projects being built in Saudi Arabia. At a ceremony in Dubai, LONGi and L&T jointly signed the contract covering two Saudi Arabian projects for which L&T is serving as EPC.