Mindspace REIT Secures Rs 650-Crore Sustainability Loan From IFC
In sustainability-linked loans, the interest rate is linked to the borrower's sustainability performance.
Mindspace Business Parks REIT becomes the first Indian REIT to secure seven-year Rs 650 crore sustainability-linked bonds from the International Finance Corp.—the private sector arm of the World Bank Group. The funds raised will primarily be used to refinance existing loans.
Shardul Amarchand Mangaldas and Co. served as the legal counsel of the issuer for this transaction. The coupon for the bond is tied to Mindspace's commitment to meeting specific ESG targets aimed at creating a greener ecosystem. While the coupon is fixed, it will decrease in a staggered manner as these targets are achieved.
In sustainability-linked loans, the interest rate is linked to the borrower's sustainability performance. Such modes have gained traction as companies seek financing instruments aligned with their sustainability goals.
After this issuance, the company's cumulative green/sustainability-linked financing now stands at Rs 18.6 billion, according to Ramesh Nair, CEO of Mindspace Business Parks REIT.
The company has undertaken certain ESG targets critical to its operations. These include a reduction in GHG emissions (Scopes 1, 2 and 3), an increase in the share of green certified area for existing buildings (under operations and maintenance), and a reduction in energy intensity.
The company's sustainability-linked instruments are based on five key components: selection of KPIs; calibration of sustainability performance targets; sustainability-linked instrument characteristics; reporting; and verification.
