India's largest cement producer UltraTech Cement said it successfully raised $500 million through a sustainability-linked loan, aligning its funding strategy with its sustainability and ESG goals.
The financing, supported by six banks, marks UltraTech's second sustainability-linked initiative following its pioneering bond issuance in 2021, the company said in an exchange filing on August 26. Sumitomo Mitsui Banking Corporation (SMBC) acted as the sole Sustainability Coordinator and advisor for the transaction. Lenders for the transaction include SMBC, SBI, BNP Paribas, DBS, MUFG and Mizuho.
The loan's Sustainability Performance Targets (SPTs) reflect UltraTech's core sustainability objectives, according to the statement. The goals include a 27% reduction in Scope 1 emissions per ton of cementitious material by 2032 from a FY17 baseline, and a goal to increase the share of green energy—derived from waste heat recovery systems, solar, and wind power—to 85% by FY30 and 100% by FY50.
As per its FY24 sustainability report, the company's scope 1 and scope 2 combined emissions intensity stood unchanged at 618.17 kg CO2e/tonne.
As India pushes forward with its ambitious climate goals, the cement industry, a significant contributor of carbon emissions, is under increasing pressure to decarbonise. The latest emissions data for FY24 from leading cement companies UltraTech, Ambuja, ACC, Shree Cement and Dalmia Bharat presents a jumbled picture of progress, highlighting both achievements and setbacks in their efforts to manage combined Scope 1 and Scope 2 emissions.
Clinker, the main raw material in cement, is responsible for nearly 90 percent of total CO2 emissions (Scope 1 and 2). Of these, about 40 percent come from burning fossil fuels, 50 percent are process-related, and the remaining 10 percent from electricity use.
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