Mindspace Business Parks, owner and developer of quality Grade A office portfolio announced its Rs 6.5 billion Sustainability Linked Bond Issuance that has been placed with International Finance Corporation (IFC), the private sector arm of the World Bank Group on June 25, 2024. The coupon of the bond is linked to Mindspace’s commitment to achieve certain ESG targets towards building a greener eco-system.
These bonds are issued for a tenure of seven years. This issuance has been rated ICRA AAA (Stable) by ICRA Limited. Shardul Amarchand Mangaldas and Company served as the legal counsel of the Issuer for this transaction.
Mindspace REIT has undertaken certain ESG targets critical to its operations. These include reduction in GHG emissions (Scope 1, 2 and 3), increasing the share of green certified area for existing buildings (under operations and maintenance), and reduction in energy intensity. The coupon of these bonds is fixed in nature, and shall be stepped down, in a staggered manner, basis achievement of the set targets.
Mindspace REIT has put into place its maiden sustainability-linked financing framework under which Mindspace REIT and/or its SPVs can undertake issuances of sustainability-linked instruments. The framework is based on five key components which include selection of KPIs, calibration of sustainability performance targets, sustainability linked instrument characteristics, reporting and verification.
Bureau Veritas, a ‘Business to Business to Society’ services company and a world leader in sustainability services, provided a second party opinion on the framework, confirming its alignment with Sustainability Linked Bond Principles (SLBPs), issued by the International Capital Markets Association and Sustainability Linked Loan Principles (SLLP) published by the Loan Market Association (LMA). Bureau Veritas also concluded that the sustainability performance targets are ambitious, meaningful and relevant in the context of Mindspace REIT’s broader sustainability and business strategy, representing a material improvement over a predefined timeline.
Mr. Ramesh Nair, Chief Executive Officer, Mindspace Business Parks REIT, commented, “We are thrilled to announce another significant milestone in our sustainability journey as we become the first Indian REIT to issue sustainability-linked bonds. International Finance Corporation fully subscribed to this issuance. This follows our maiden green bond issue in March 2023. Post this issuance our cumulative green/sustainability-linked financing now stands at Rs 18.6 billion, strengthening our commitment to responsible growth. Our purpose to ‘build sustainable ecosystems’ helps us create long-term value for stakeholders, blending financial success with the environmental and social benefits.”
“We are pleased to partner with Mindspace REIT for its maiden sustainability-linked bond,” said Wendy Werner, IFC Country Head for India. “IFC’s investment will help Mindspace enhance the sustainability of its portfolio of business parks and reduce greenhouse gas emissions year-on-year. This partnership aligns with India’s net-zero ambitions and demonstrates the viability of climate finance in the real estate sector. Our support aims to attract more diverse and long-term funding at a time when private capital is critical to build a greener, more resilient future.”