Mumbai: Tata Communications on Thursday said it has raised $250 million sustainability loan from DBS Bank, ANZ and Export Development Canada (EDC). The loan is of a five-year tenor, and is called as a sustainability-linked loan (SLL), wherein progress on carbon emission targets will determine the costs, according to a statement. The interest rate margin of the loan will be adjusted up or down in accordance with the progress that Tata Communications will achieve on its carbon emission reduction targets, it explained, claiming that this is a first of its kind transaction in India.

Such short-term targets, creating a link between the cost of banking facilities and progress achieved on key environmental milestones, are consistent with the company's longer-term ambition to be Net Zero across its global operations by 2035, the statement said. DBS Bank India's head of institutional banking group Rajat Verma hinted at other corporations also opting for similar facilities, and said the lender looks forward to enabling companies to adopt practical decarbonisation strategies to collectively shape a more sustainable future.

"We see significant opportunities for other companies to align their financing with their environmental commitments and believe the facility will pave the way for other borrowers in India and across Asia to set robust sustainability performance targets," ANZ's head of sustainable finance Stella Saris Chow said. Tata Communications' chief financial officer Kabir Ahmed Shakir said it believes in sustainability as a value creator and added that it intends to drive positive change.