Tata Communications Ltd. secured its maiden five-year $250 million (or about Rs 2,091 crore) sustainability-linked loan from three foreign banks as part of its new framework to link its funding with key objectives such as carbon emission reduction targets.
Australia-based ANZ acted as the lead sustainability coordinator for the loan, while Singapore's DBS Bank and Export Development Canada were the joint sustainability coordinators.
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.
The interest rate margin of the loan will be adjusted in accordance with the progress that Tata Communications will achieve on its carbon emission reduction targets, according to a statement issued on Thursday.
"Such short-term targets, creating a link between the cost of banking facilities and progress achieved on key environmental milestones, are consistent with the company's longer-term ambition to be net zero across its global operations by 2035," the company said.
Shares of Tata Communications closed 1.83% higher at Rs 1,864.95 apiece on Thursday, as compared with a 0.18% advance in the benchmark BSE Sensex.
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