Unlike traditional green bonds, SLBs involve issuers pledging to improve their performance against tailor-made environmental, social and governance targets.
Singapore-based Sembcorp Industries has raised S$675 million (675 million Singapore dollars) through sustainability-linked bonds (SLB) with a tenor of 10-and-a-half years and a coupon rate of 2.66%, the company said on Wednesday. The money will be utilised in financing the company’s working capital requirements, refinancing the group’s existing debt and financing or refinancing its renewable energy projects.
Vipul Tuli, CEO, South Asia, of Sembcorp Industries, recently told FE that the company is eyeing the acquisition route to increase its renewable energy base in India; it aims to raise its green power portfolio globally from the existing 3 gigawatt (GW) to 10 GW by 2025.
The company operates in the country through Sembcorp Energy India , which currently runs 4.8 GW of power-generation assets in the country, entailing an investment of about Rs 35,000 crore, comprising of 2.6 GW of thermal plants and the remaining capacity consisting of renewable energy projects.
Unlike traditional green bonds, SLBs involve issuers pledging to improve their performance against tailor-made environmental, social and governance targets. The interest rate of the SLBs will be subject to a step-up margin of 0.25% after the first interest payment date on April 1, 2026 if the target of reducing greenhouse gas emissions intensity to 0.40 tonne of carbon dioxide equivalent per megawatt hour is not achieved by Sembcorp by December 31, 2025.
Sembcorp’s SLB issuance is anchored by an investment of S$150 million from the World Bank Group’s International Finance Corporation.