45800 - DCM TCCL SLB

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Summary of Investment Information

Project Number

45800

Company Name

TATA CLEANTECH CAPITAL LIMITED

Date SPI Disclosed

May 11, 2022

Country

India

Region

South Asia

Projected Board Date

Jun 15, 2022

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

May 5, 2024

Department

CF4S5 - Regional Industry - FIG Asia & Pac/FIG Inv Ops - South Asia

Industry

Financial Markets

Previous Events

Approved : Jun 13, 2022
Signed : Feb 20, 2023
Invested : Mar 23, 2023

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The proposed investment comprises upto INR3,750million (US$50 million equivalent) investment in Tata Cleantech Capital Limited (TCCL or the Company) through subscription of unlisted secured redeemable non-convertible debentures (NCDs) to be issued by the Company. The proceeds of the IFC investment will be primarily used to finance wind and solar projects and to a limited extent sectors such as energy efficiency, e-mobility, green-warehousing and water.

Setup in 2011, TCCL is registered with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit Accepting Non-Banking Financial Infrastructure Finance Company (NBFC-IFC), engaged in the business of providing finance and advisory services for projects in renewable energy, energy efficiency, waste management, water management and cash flow-based infrastructure finance. As of March 2022, TCCL has an asset under management (AUM) of ~US$1000 million and a networth of ~US$218 million.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	48.28
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Labeled: Green;Blue;Social-Loans/Bonds

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Increased access to climate finance - India has large climate financing needs as it has pledged that renewable energy (RE) will be 40% of the country’s electricity generation capacity in 2030. The proposed investment will support TCCL to increase financing for RE projects. Contribution to Market Creation: Sustainability: The Project will lead to increased sustainability by catalyzing the issuance of first sustainability linked instrument by a financial institution in India that follows the International Capital Markets Association (ICMA) Guidelines. Moreover, it will help establish standards for such issuance in the domestic capital markets and thus create an alternative asset class for channeling institutional investors in this domain. The market creation impact will be brought through innovation, demonstration, and capacity building channels. In addition, there is integration aspect of the market creation as well.

E&S Category Rationale / Risks and Mitigation

The proposed investment comprises subscription of secured non-convertible debentures (NCDs) to be issued by Tata Cleantech Capital Limited (TCCL or the Company). The proceeds of the IFC investment will be used to finance renewable energy projects specifically wind and solar power projects and to a limited extent other sectors like electric mobility, energy efficiency, green warehousing and water related projects (e.g., wastewater treatment) in India. Some of these projects may be in early stages of development, i.e., where construction is involved, while others will be operational assets. Most of the projects are expected to be medium risk in nature with very few in high-risk category (typically large capacity renewable energy projects). Overall, the E&S risk of the proposed investment is medium, and the project is categorized as FI-2 in accordance with IFC’s Environmental and Social Sustainability Policy. Potential E&S risks arise from the construction and operation phase of the projects. This includes risk and impacts related to Occupational Health & Safety (OHS), Labor and working conditions including that of third-party workers and workers engaged in primary supply chain, impact on avifauna, and community grievances. In some early-stage projects, there may be issues related to land, indigenous peoples, and biodiversity depending on location of the projects. Most of these risks and impacts can be identified and managed through adequate due-diligence, implementation of management plans and portfolio monitoring. The project will not support coal-related activities and will not finance any higher risk business activities that may include a) involuntary resettlement, b) risk of adverse impacts on indigenous peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage d) significant occupational health and safety risks. The Company will publicly disclose information on Category A and other qualifying climate related sub-projects that will be supported by this IFC investment. The applicable performance requirements for this project will be i) the Exclusion List; ii) the host country laws and regulations; and iii) the IFC Performance Standards.

TCCL is an existing IFC client. TCCL is implementing a satisfactory E&S risk management system (ESMS) and has a qualified E&S specialist as its ESMS officer. The ESMS includes an E&S policy and detailed procedures covering risk screening mechanisms, criteria and guidelines for conducting E&S due diligence (ESDD) and monitoring and supervision for the portfolio companies. In addition to the qualified E&S staff, TCCL also engages qualified third-party E&S consultants to conduct the ESDD for Category A investments. The level of ESMS implementation is satisfactory. The existing ESMS will be applied to this project as well. TCCL has adequate HR policies which are in line with IFC Performance Standard - 2 requirements and follows the applicable Life and Fire Safety requirements.

Contacts

For Inquiries About the Project, Contact

Tata Cleantech Capital Limited
Swati Bharadwaj
Head-Strategic Partnership
+91 22 6606 9000
Swati.Bharadwaj@tatacapital.com
11th Floor, Tower A, Peninsula Business Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai - 400013
https://www.tatacapital.com

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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