MUFG Bank has extended a Re450mn (US$54mn) trade finance facility to help India’s Tata Power develop two solar power projects expected to generate a combined 220 megawatts (MW) of renewable energy for the country.
It is the first “sustainable trade finance facility” MUFG has offered in India and the Japanese lender says it may pave the way for further financing packages as Tata tries to boost its clean energy portfolio.
The facility will allow TP Kirnali, a subsidiary of Tata’s renewable power arm, to use documentary trade finance for the procurement of both a 100MW project in Parthur, Maharashtra state and a 120MW project in Mesanka, Gujarat.
Shashank Joshi, deputy CEO of MUFG India, says the bank “has long played a defining role in the sustainability journey of India’s corporate sector and is extremely delighted to partner with Tata Power”.
“Industries such as the power sector have traditionally been highly carbon intensive, but there is a growing recognition of a need to change,” he adds. India aims to reach net-zero greenhouse gas emissions by 2070, much later than most developed countries, although Tata Power hopes to reach the same goal by 2045.
Belinda Han, MUFG’s head of transaction banking in Asia Pacific, says: “As more corporates include ESG goals as part of their KPIs, MUFG is committed to supporting our clients towards the achievement of these goals. This facility is designed to support our clients’ sustainability agendas and catalyse the greening of global supply chains and we are excited to launch this in India.”