MUFG Bank Executes Rs 450 Cr Sustainable Trade Finance Facility for Tata Power’s Renewable Energy Biz
MUFG Bank Ltd, one of the major lenders of Japan, has executed Rs 450 crore sustainable trade finance facility for the Indian utility major Tata Power.
December 23, 2022. By Manu Tayal
This credit facility was extended for the solar projects under TP Kirnali Ltd (TPKL) a 100 per cent owned subsidiary of Tata Power Renewable Energy Ltd (TPREL), a clean energy platform.
It is the first sustainable trade finance facility offered by MUFG in India and TPKL will utilise the funds towards generating renewable energy capacity.
The collaboration will open up further opportunities to raise green financing as Tata Power continues to increase its clean energy portfolio and contribute towards India’s net-zero targets.
Commenting on the partnership, Belinda Han, MUFG’s Head of Transaction Banking Asia Pacific, said “MUFG is honoured to partner with Tata Power on this landmark sustainable trade finance facility. As more corporates include ESG goals as part of their KPIs, MUFG is committed to supporting our clients towards the achievement of these goals. This facility is designed to support our clients’ sustainability agendas and catalyse the greening of global supply chains and we are excited to launch this in India.”
MUFG extended this financing to fund the procurement of TPKL’s two solar power projects – a 100MW project in Parthur, Maharashtra and a 120MW project in Mesanka, Gujarat – under documentary trade finance.
MUFG is a global leader in renewable generation projects and has also been ranked the top lead arranger in Bloomberg’s league tables for clean energy financing for six of the past nine years.
“Tata Power is committed to transitioning its business to make sustainable power available through clean energy sources. We are happy to avail of MUFG’s sustainable trade finance facility to further this green transition. The association will open up opportunities to explore raising more green finance as we expand our clean energy portfolio and significantly contribute towards India's net zero targets,” said Sanjeev Churiwala, CFO of Tata Power.
Shashank Joshi, Deputy CEO of MUFG India, said, “This deal marks another milestone in establishing MUFG as a preferred ESG financer in the region. MUFG has long played a defining role in the sustainability journey of India’s corporate sector and is extremely delighted to partner with Tata Power. Industries such as the power sector have traditionally been highly carbon intensive, but there is a growing recognition of a need to change. This deal underpins MUFG and Tata Power’s joint commitment to renewable energy and ensures a strong sustainable source of green power to the country.”
Meanwhile, Tata Power aimed to become carbon net zero before 2045 and MUFG has announced its commitment to achieving net zero emissions in its finance portfolio by 2050 and its own operations by 2030.
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