Vedanta Raises $250 Million for Sustainability Efforts

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by KnowESG,

Vedanta Ltd

Image of Vedanta Aluminium's industrial area in India.

Vedanta Aluminium, India's largest aluminium producer, has obtained USD 250 million in Sustainability Linked Loans (SLL) from international banks to finance capital expenditures and reduce carbon emissions.

The SLLs were given to Vedanta Aluminium based on its commitment to meet certain decarbonisation and safety targets. The funds will be used for capital expenditures to support the company's growth, including increasing the production of value-added aluminium products and achieving greater backward integration.

The loans were provided by international banks from the Middle East and Far East, including Mashreq Bank, First Abu Dhabi Bank, Qatar National Bank, and CTBC Bank, among others. These banks have established new term lending relationships with the Vedanta Group through this loan facility.

This is the Vedanta Group's first sustainability-linked loan and signals the company's commitment to investing in environmentally friendly growth. The loan demonstrates the company's efforts to reduce carbon emissions, as evidenced by a 24% reduction in greenhouse gas (GHG) emissions intensity from its 2012 baseline.

Vedanta Aluminium was India's largest consumer of renewable energy in the last fiscal year, using 3 billion units to produce India's first low-carbon green aluminium product, called "Restora". This sustainability-linked loan sets the foundation for the company's future environmentally conscious initiatives.

Mr Rahul Sharma, CEO – Aluminium Business, Vedanta Ltd. said, “Aluminium will be indispensable to a low-carbon future, with critical applications across a vast spectrum of industries ranging from electric vehicles to renewable energy and more. We intend to build our expansion plans on the foundation of sustainability, with a strong emphasis on people safety, decarbonisation of our value chain, and water-positive operations. The funds raised through sustainability-linked loans will be used to grow our business responsibly and sustainably."

Mr Tarek El Nahas, Group Head of International Banking at Mashreq, said: “We are delighted to lead this flagship deal and partner with Vedanta, the largest aluminium producer in India, in its first sustainability-linked loan. We see the transition to a low-carbon and resilient economy as a real opportunity to double our commitment to sustainable finance and invest in sectors that will drive responsible economic growth. This partnership represents a notable addition to the robust sustainability framework that we are deploying to create more value for our people, customers, and shareholders.”

Mr Fawaz Abusneineh, Acting Head of Global Corporate Finance at First Abu Dhabi Bank (FAB), said, “FAB is pleased to support Vedanta’s sustainability agenda through our innovative finance solutions and to continue to deepen our investment in India’s environmental and economic future. As a leading financial institution, we are firmly committed to setting benchmarks for sustainability in banking and finance, having issued the Middle East’s first green bond in 2017 and being the first bank in the GCC to commit to achieving net-zero greenhouse gas emissions across our operations and lending portfolios. We are confident that this latest partnership will achieve a significant impact by helping drive the transition to cleaner and greener manufacturing.”

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Source: Vedanta

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