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ESG Investing / Treasury & Capital Markets
MUFG, SBI close landmark US$1 billion social loan
One of largest ESG commercial loans in Asia-Pacific, second-largest social loan globally
The Asset 1 Mar 2023

Japan's MUFG Bank has completed a US$1 billion syndicated social loan facility for State Bank of India (SBI), India’s largest bank, that is MUFG’s second social loan in India and SBI’s inaugural social loan.

This syndicated transaction is one of the largest environmental, social and governance (ESG) loans to a commercial bank in the Asia-Pacific region, and the second-largest social loan globally. Proceeds from this loan will be used to finance social projects, such as affordable housing and lending for small and medium-sized businesses, including women entrepreneurs, micro entrepreneurs, self-help and joint liability groups, and smallholder farms.

MUFG is the lead social loan coordinator for this transaction, and one of two lead arrangers, underwriters and bookrunners mandated to arrange a US$500 million facility with a greenshoe option. The syndication closed successfully with commitments received from 22 banks, and the facility was subsequently upsized to US$1 billion.

This transaction underscores SBI’s longstanding commitment to supporting green and social projects in India. As lead social loan coordinator, MUFG worked with SBI on publishing its sustainable financing framework, covering both the green and social uses of proceeds.

This framework is in line with the 2021 Green Loan Principles and Social Loan Principles – globally-recognised methodologies developed by the Loan Market Association, the Asia Pacific Loan Market Association and the Syndications and Trading Association to consistently certify, track and monitor the environmental and social impact of financing assets. MUFG also worked with SBI in engaging Sustainalytics to provide the second-party opinion.

Shashank Joshi, deputy CEO of MUFG Bank India, says: “This deal is a testimony to SBI’s status as India’s national banking champion and the transformational role it plays in the Indian ESG financing landscape.”

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