Larsen & Toubro secures $107m sustainability-linked loan from SMBC

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Indian conglomerate Larsen & Toubro (L&T) has secured a three-year sustainability-linked loan of $107 million from Sumitomo Mitsui Banking Corporation (SMBC) to help achieve its environmental, social, and governance (ESG) goals.

The Japanese banking group has been appointed by Larsen & Toubro as the sole sustainability coordinator and lender.

Toshitake Funaki — Sumitomo Mitsui Banking Corporation India CEO said: “This transaction supports SMBC Group’s initiatives to contribute to a sustainable society through its financial services. We are delighted to be the Sustainability Coordinator and Lender for this SLL facility to our core client, L&T”.

Larsen & Toubro secures $107m sustainability-linked loan from Sumitomo Mitsui Banking Corporation

Larsen & Toubro secures $107m sustainability-linked loan from Sumitomo Mitsui Banking Corporation. Photo courtesy of Batmaniacs/Wikipedia.org.

According to Larsen & Toubro, the sustainability-linked loan facility comes with reductions in interest rate associated with the achievement of a couple of its predetermined sustainability targets. These include lowering greenhouse gas emission intensity and intensity of water consumption against the target levels.

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The targets have been picked on the basis that they are both relevant and material to its overarching position and strategy in sustainability, said the Indian conglomerate.

Larsen & Toubro said that the loan satisfied the essential requirements under the Sustainability Linked Loan Principles and DNV Business Assurance Singapore Pte. Ltd. has given a second party opinion on the sustainability-linked loan.

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R Shankar Raman — Larsen & Toubro Group CFO and Whole Time Director said: “L&T continues to focus on achieving Water Neutrality by 2035 and Carbon Neutrality by 2040. Our long-term strategic plan also clearly outlines the ESG roadmap towards this goal. This SLL transaction with SMBC is an important step in that journey and underlines our intent on the ESG front.”

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