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Union Bank Of India Inks Its First Overseas Sustainability Linked Loan

Union Bank of India in a statement said that it will include three Key Performance Indicators (KPIs) relating to a reduction in greenhouse gas emissions, responsible sourcing of metals, and growing renewable power portfolio, under this facility.

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Union Bank of India, on Tuesday, said that it has secured a Sustainability linked Loan aggregating to a total syndicated facility of USD 1.5 billion with one of the leading trading corporations globally, through its international banking division. 

Union Bank of India in a statement said that it will include three Key Performance Indicators (KPIs) relating to a reduction in greenhouse gas emissions, responsible sourcing of metals, and growing renewable power portfolio, under this facility. 

The sustainability-linked KPIs will have to be tested annually and verified by a third-party expert. Under this structure, the interest rate paid by the borrower on the credit facilities will decrease or increase based on the group’s progress on three key performance indicators (KPIs). 

By proactively integrating sustainability KPIs into its financing, Union Bank of India has become one of the first few Banks in the Asia Pacific region to tangibly demonstrate its commitment towards achieving ambitious environmental and responsible lending, reducing its carbon footprint, and diversifying its asset base towards renewable energy.

This facility is at the forefront of innovation in the sustainable finance space and will undoubtedly pave the way for similar transactions in the loan market. It also demonstrates the Union Bank of India`s commitment to climatic changes and efforts to move towards a more sustainable model of lending.

 

 

 


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