Sumitomo Mitsui Banking Corporation (SMBC), along with two other banks, has closed a 64 billion yen (US$440 million) syndicated external commercial borrowing (ECB) with a blue loan tranche for India’s Housing and Urban Development Corporation Limited (Hudco).
SMBC is the mandated lead arranger and bookrunner, joint ESG loan coordinator, agent bank, and the authorized dealer bank in the transaction. This is Hudco’s second ECB borrowing from SMBC and its maiden foreign-currency blue loan transaction.
A portion of the five-year loan would qualify as a blue loan since it was used to support the Jal Jeevan Mission in India, an ambitious programme launched by the Government of India to provide functional household tap water connection to every rural household such as the Har Ghar Nal Se Jal by 2024.
Hudco has sanctioned a total financial assistance of 70.91 billion rupees (40 billion rupees for Phase I in 2022 and 30.91 billion rupees in Phase II in FY 2024) to the Government of Rajasthan covering various districts in the Indian state.
SMBC worked closely with Hudco to establish its sustainable financing framework, which is in line with the Green Loan Principles and Social Loan Principles. These methodologies are designed to achieve positive social outcomes for the company and green initiatives outlined by the Reserve Bank of India.
Commenting on the transaction, SMBC India country head Hiroyuki Mesaki says: “The deal with Hudco is a testament to SMBC’s credentials globally and further embodies our mission towards investing a cumulative total of 50 trillion yen into sustainability-related financing globally by 2030. This deal will also contribute towards creating a better life for underserved communities.”
Rakesh Garg, chief business officer at SMBC India, adds: “We are excited and proud to partner with Hudco on their second offshore borrowing and maiden blue loan transaction, and in their mission to provide better infrastructure including tap water and drinking water facilities while also improving the quality of life for the community.”
