UltraTech Cement, India’s largest cement producer, has successfully secured $500 million through a sustainability-linked loan, aligning its funding strategy with its sustainability and ESG objectives.
This financing, backed by six banks, marks UltraTech’s second sustainability-linked initiative following its groundbreaking bond issuance in 2021, as stated in an exchange filing on August 26. Sumitomo Mitsui Banking Corporation (SMBC) served as the sole Sustainability Coordinator and advisor for the transaction. The lenders involved in the transaction include SMBC, SBI, BNP Paribas, DBS, MUFG, and Mizuho.
The loan’s Sustainability Performance Targets (SPTs) are aligned with UltraTech’s core sustainability goals. These targets include reducing Scope 1 emissions per ton of cementitious material by 27% by 2032 from an FY17 baseline, and increasing the share of green energy—sourced from waste heat recovery systems, solar, and wind power—to 85% by FY30 and 100% by FY50.
According to its FY24 sustainability report, the company’s combined Scope 1 and Scope 2 emissions intensity remained steady at 618.17 kg CO2e/tonne.
As India advances its ambitious climate goals, the cement industry, a major contributor to carbon emissions, faces growing pressure to decarbonise. The latest emissions data for FY24 from leading cement companies, including UltraTech, Ambuja, ACC, Shree Cement, and Dalmia Bharat, presents a mixed picture of progress, reflecting both achievements and challenges in managing combined Scope 1 and Scope 2 emissions. Clinker, the primary raw material in cement, accounts for nearly 90% of total CO2 emissions (Scope 1 and 2), with approximately 40% from burning fossil fuels, 50% from the cement production process, and the remaining 10% from electricity usage.