UltraTech Secures $500mn Financing For Sustainability Initiatives

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UltraTech Cement Limited (UltraTech) recently raised $500 million through a sustainability-linked loan, with participation from six banks. Sumitomo Mitsui Banking Corporation (SMBC) acted as the sole Sustainability Coordinator for this transaction and served as the exclusive advisor on UltraTech’s Sustainability-Linked Financing Framework. The primary lenders in the transaction include SMBC, SBI, BNP Paribas, DBS, MUFG, and Mizuho. The latest financing is set to boost the potential of the firm to undertake sustainability initiatives like emission reductions.

This transaction marks UltraTech’s second sustainability-linked financing, following its inaugural sustainability-linked bond issuance in 2021. The financing aligns with UltraTech’s ongoing commitment to integrate its funding strategy with its sustainability and ESG goals.

This financing also aligns with UltraTech’s recently published Sustainability-Linked Financing Framework, which covers the company’s future sustainability-linked bond and loan issuances. UltraTech’s Framework initiative is designed to fulfill its commitment to the Sustainability-Linked Bond Principles published by the ICMA, and the Sustainability-Linked Loan Principles published by the LMA/LSTA/APLMA. The Framework has received a Second Party Opinion from S&P Global Ratings.

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The Sustainability Performance Targets (SPTs) detailed in the Framework reflect UltraTech’s core sustainability principles and business objectives. These targets include:

• A 27% reduction in Scope 1 emissions, measured in kgCO2 per ton of cementitious material (kgCO2/t.cem), by March 31, 2032, from an FY17 baseline.
• Increasing the share of green energy from waste heat recovery systems (WHRS), solar, and wind power in its total energy mix to 85% by FY30 and 100% by FY50.

UltraTech’s Sustainability Approach

In 2023-24, UltraTech revamped its Materiality Assessment, adopting the Double Materiality process following international standards and aligning it with Risk Assessment procedures. This new approach, guided by the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), Integrated Reporting (IR), and the European Sustainability Reporting Standards (ESRS), includes broader stakeholder engagement. It provides insights into both external impacts on society and the environment, as well as internal impacts on UltraTech’s financial performance and brand value. The company prioritizes sustainability and transparent governance to minimize impact and create long-term value for stakeholders.

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