Coal terminal developer issues sustainability-linked bond and is strongly criticized

An Indian port operator developing a coal terminal has sparked controversy after it raised $400 million from its debut sustainability-linked bond de acuerdo a Environmental Finance.

The transaction is the company’s first bond issue, and the first sustainability-linked bond from an Indian port operator.

The seven-year bond saw its orderbook rise to more than $1.35 billion, before finalising at $1.13 billion after pricing was tightened by 30 basis points to 4.95% from the initial 5.25% initially guided.

The banks involved in the JSW Infrastructure transaction were criticized due to the port firm building a new 12 million tonne per year coal terminal in India. In particular, Standard Chartered for its involvement, considering its net-zero 2050 pledge made in May. The landmark net-zero pathway from the International Energy Agency (IEA) stated that no new fossil fuel projects can be developed if the world is to remain on track to reach its climate goals. Building new coal terminals will clearly enable the expansion of the coal sector when the world’s foremost energy authority says that it can no longer be expanded. Net zero means no new fossil fuel expansion, but Standard Chartered is doing exactly the opposite by financing a company building a new coal export terminal.