Original disclosure @ IFC website
Updated in EWS Aug 4, 2022
Disclosed by Bank May 11, 2022
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According to IFC, the proposed investment comprises upto INR3,750million (US$50 million equivalent) investment in Tata Cleantech Capital Limited (TCCL or the Company) through subscription of secured non-convertible debentures (NCDs) to be issued by the Company. The proceeds of the IFC investment will be primarily used to finance wind and solar projects and to a limited extent sectors such as energy efficiency, e-mobility, green-warehousing and water. Setup in 2011, TCCL is registered with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit Accepting Non-Banking Financial Infrastructure Finance Company (NBFC-IFC), engaged in the business of providing finance and advisory services for projects in renewable energy, energy efficiency, waste management, water management and cash flow-based infrastructure finance.
The sustainability linked bond will be amongst the first few private sector led issuances by a financial institution in India and the wider Asia region.
Some of these projects may be in early stages of development, i.e., where construction is involved, while others will be operational assets. Most of the projects are expected to be medium risk in nature with very few in high-risk category (typically large capacity renewable energy projects). Overall, the E&S risk of the proposed investment is medium, and the project is categorized as FI-2 in accordance with IFC’s Environmental and Social Sustainability Policy.
Potential E&S risks arise from the construction and operation phase of the projects. This includes risk and impacts related to Occupational Health & Safety (OHS), Labor and working conditions including that of third-party workers and workers engaged in primary supply chain, impact on avifauna, and community grievances. In some early-stage projects, there may be issues related to land, indigenous peoples, and biodiversity depending on location of the projects. Most of these risks and impacts can be identified and managed through adequate due-diligence, implementation of management plans and portfolio monitoring. The project will not support coal-related activities and will not finance any higher risk business activities that may include a) involuntary resettlement, b) risk of adverse impacts on indigenous peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage d) significant occupational health and safety risks. The Company will publicly disclose information on Category A and other qualifying climate related sub-projects that will be supported by this IFC investment. The applicable performance requirements for this project will be i) the Exclusion List; ii) the host country laws and regulations; and iii) the IFC Performance Standards.
The investment comprises a secured debt investment of up to INR3,750 million (US$50 million equivalent) structured as unlisted redeemable non-convertible debentures (NCDs). IFC will explore structuring the NCD as a Sustainability Linked Bond (SLB).
The shareholders of TCCL are Tata Capital Limited (TCL, 80.5%) and International Finance Corporation (19.5%). Tata Sons Private Limited holds 94.55% in TCL as on December 31st, 2021.
TCCL is headquartered in Mumbai and has lending operations to projects across India.As of December 2021, TCCL has an asset under management (AUM) of c.US$953 million and a networth of US$212 million. As of December 2021, TCCL’s loan book composition is as follows: solar (50%), wind (22%), road (11%), transmission (2%), emerging sectors such as e-mobility, energy efficiency, etc. and others including water management and corporate loans comprise the balance 15%.
Tata Cleantech Capital Limited
+91 22 6606 9000
11th Floor, Tower A, Peninsula Business Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai - 400013
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