DBS Bank extends transition loan facility to Shree Renuka Sugars for replacing fossil fuel usage by scaling bioethanol production
- Proceeds will be used to finance the expansion of Shree Renuka Sugars Ltd's bioethanol production capacity, contributing to India's target to blend 20% of ethanol in petrol by 2025
- Likely to be the first such transition loan extended by a foreign bank to India's biofuel manufacturing industry
MUMBAI, India, May 11, 2022 /PRNewswire/ -- To support India's push to double the country's ethanol distillation capacity and blend 20% of ethanol in petrol by 2025, Shree Renuka Sugars Ltd (SRSL), a subsidiary of Wilmar International Ltd, Singapore and one of the largest sugar and green energy (ethanol and renewable power) producers in India, has obtained a five-year INR1.75 billion (SGD31 million) transition finance facility from DBS. The proceeds will be used to finance the expansion of SRSL's sustainable bioethanol business in India. This is believed to be the first transition loan to be provided by a foreign bank to India's biofuel manufacturing industry.
According to Platts Analytics1, India's fuel ethanol consumption is estimated to reach nearly 3 billion litres in 2022 and 3.2 billion litres in 2023. This would be an increase from an estimated 2.7 billion litres in 2021, equating to an ethanol blending rate of roughly 6.1% - which translates to displacing 30,973 barrels per day of fossil fuels.
SRSL's focus on the capacity expansion of its bioethanol plants in India supports its commitment towards promoting sustainable growth and combating climate change.
Sunil Ranka, CFO, SRSL, said, "Bioethanol production is not new to India. But it holds the key for the transition of the energy sector's reliance on fossil fuels, to more sustainable biofuels which have a lower carbon footprint and will lead to energy independence of the country. To provide some perspective, India has an ethanol production capacity of about 849 crore litres today. For India's targeted 20% blending of ethanol in petrol by 2025, the market will need 1,700-crore litre capacity (80% plant efficiency), and this is where we hope to contribute to the growth of the global biofuel industry by ramping up our bioethanol production capacity to contribute to achieving this ambitious but meaningful target."
Niraj Mittal, Managing Director, and Country Head of Institutional Banking Group, DBS Bank India, said, "Transitioning to bioethanol and other biofuels are expected to play a valuable role in the transition of the power and energy sector towards net zero. These alternative fuel mixes offer the land and marine transport industry a realisable path to achieving decarbonisation, while reducing their dependence on fossil fuels. As a bank, we are committed to financing the transition to a lower carbon future, and this latest transition loan facility with Shree Renuka Sugars Ltd reinforces our continued commitment to work alongside our like-minded partners in collective efforts to transition industries from brown to light brown and gradually to green, and work towards becoming net zero in the coming decades."
In October 2021, DBS became the first Singapore bank to become a signatory on the United Nations-convened, industry-led Net-Zero Banking Alliance (NZBA). As a signatory, DBS commits to transition the operational and attributable greenhouse gas (GHG) emissions from its lending and investment portfolios to align with pathways to net zero by 2050 or sooner.
The transition loan provided to SRSL is also in line with DBS' broader efforts to provide sustainable financing to more corporates to support their transformations towards a lower carbon future. In testament to its efforts, DBS committed a total of SGD 20.5 billion in sustainable financing transactions in 2021, taking the bank's cumulative efforts to SGD 39.4 billion – achieving almost 80% of the bank's SGD 50 billion sustainability financing target by 2024.
About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named "World's Best Bank" by Euromoney, "Global Bank of the Year" by The Banker and "Best Bank in the World" by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named "World's Best Digital Bank" by Euromoney and the world's "Most Innovative in Digital Banking" by The Banker. In addition, DBS has been accorded the "Safest Bank in Asia" award by Global Finance for 13 consecutive years from 2009 to 2021.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region's most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com.
About Shree Renuka Sugars Limited
Shree Renuka Sugars is one of the largest sugar and green energy (ethanol and renewable power) producers in India . The company is a leader in branded sugar segment in the country and the largest sugar refiner in India. The company has its corporate office in Mumbai (Maharashtra, India) and Head Office in Belgaum (Karnataka, India).
The company operates in the sugar, ethanol and power segment and has seven integrated sugar mills in sugar rich belt of South and West India and largest mover of sugar in the country from its two port-based refineries in India. For more information, please visit www.renukasugars.com
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