MUFG Bank structures $333 million green financing deal

MUFG Bank has helped structure a US$333 million green financing deal for SoftBank's latest and largest solar project in India.

This deal is the first green certification of a solar project loan for both the client and the country, MUFG said.

The 900 megawatt-DC solar farm in the Phalodi-Pokhran Solar Park in the State of

Rajasthan, India, is the seventh and largest project of its type in line to be commissioned by SB Energy Holdings Limited (SB Energy), a majority-owned subsidiary of SoftBank Group.

MUFG also acted as original mandated lead arranger and lender, bookrunner, facility agent, intercreditor agent, account bank and hedging bank. This is the third project financing undertaken by MUFG for Softbank in India. The transaction closed in August, and with the bank's assistance, attained green certification on 22 December 2020.

"We would like to congratulate SoftBank for achieving yet another milestone towards its sustainability agenda," said Colin Chen, MUFG's Head of Structured Finance, Asia Investment Banking Division. "At MUFG, we share the same commitment towards environmentally and socially responsible business practices, and with this latest deal, is pleased to reaffirm our proven track record as Softbank's go-to project financier for projects in India as well as our market leadership in ESG and renewables financing."

MUFG's securing of green loan certification for SoftBank represents the first time that a project loan in India has been certified using guidelines aligned with the LMA / APLMA Green Loan Principles, a globally-recognised framework designed for participants in the sustainability financing market to consistently certify, track and monitor the environmental impact of financing assets.

This is also SB Energy's inaugural green loan certification amongst its renewable projects. KPMG provided the independent limited assurance for the green loan. The loan also received CBI certification from Climate Bonds Initiative under the Climate Bonds Standard, which marks it as the first CBI certified loan from India.

MUFG has committed to a total of JPY20 trillion (USD$88 billion) into sustainability related financing by 2030, and committed 19% of this amount (JPY3 trillion or USD35 billion) in the first year, the 2019 financial year.

"SB Energy is committed to maintaining the highest quality ESG principles in all of our projects," said Vijay Venkatachalam, CFO of SB Energy. "We are especially delighted to secure green loan certification for this project for which we have raised India's largest ever multi-currency project financing in the renewable sector. We are privileged to partner leading domestic and international banks and financial institutions for our financing needs and are pleased that they continue to repose their trust in our ability to consistently deliver projects."

Earlier in December, MUFG announced its participation in another green financing deal. Canberra's light rail network has refinanced a $280 million debt facility, with Canberra Metro assisted by financial advisors MUFG, green loan coordinators ANZ and CBA and mandated lead arranger banks ANZ, CBA, ING, Mizuho, NAB and SMBC.

The Canberra Metro debt facility is certified as a green loan under the Climate Bond Initiative's Low Carbon Transport Criteria.

The project incorporated sustainability principles during design and construction and is now running on 100% renewable electricity and utilising environmentally friendly measures across its operation.

The green loan has been issued in accordance with the Asia Pacific Loan Market Association's green loan principles.

Read more: INGSB EnergyNABMUFG BankCanberra MetroCBASoftBank GroupAPLMA Green LoanClimate Bond InitiativeClimate Bonds StandardColin ChenKPMGMizuhoPhalodi-Pokhran Solar ParkSMBCVijay Venkatachalam
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