Leading water solutions company Rean WaterTech receives loan from novel Social Bond recently launched under the leadership of responsAbility

Investing in rural water connectivity in India: responsAbility mobilizes private capital for water infrastructure development

February 20226 min read

Swiss sustainable investment house responsAbility delivers another financing from its novel Social Bond Financing for Healthier Lives. Recipient of the loan is an innovative integrated Indian water solutions company – Rean WaterTech. The company executes turnkey water-supply and wastewater projects (on built, operate and transfer basis) in rural and semi-urban areas in India in partnership with government and development agencies.

Water Treatment Plant at Village Bhatera

Zürich / Kolkata, 1 February 2022 — Rean WaterTech and responsAbility have completed a loan financing from the Social Bond – Financing for Healthier Lives. The financing which has been arranged by Unitus Capital will enable Rean WaterTech to take up and execute new rural water infrastructure projects across India. The loan is funded from the capital mobilized via the Social Bond from private investors. Financing for Healthier Lives pools loans to capital-scarce innovative companies from developing countries that have a measurable positive social impact. The Social Bond is the first of its kind and has been conceived and launched under the leadership of the sustainable investment house responsAbility and in close cooperation with the Swedish International Development Agency (SIDA) and Danske Bank.

Access to clean and reliable drinking water and sanitation are basic human rights. The Indian government has made the provision of safe and adequate drinking water through individual household connections a key target and this has been made more critical by Covid-19 in which good hygiene is key to preventing further spread in the community. Many households, especially in the rural and semi-urban region still do not have direct connectivity to drinking water. As per studies done in 2019, only 18.3% of rural households were connected with pipe water.

Rean WaterTech offers a solution, by partnering with state and central governments to develop water infrastructure at places most in need. Post-completion of these projects, Rean would continue to operate and maintain these infrastructures for contracted number of years before transferring the ownership back to the government. The loan financing provides Rean WaterTech with the financial support and development capital to deliver more rural water projects in different parts of the country that would directly benefit the rural population. Rean’s completed projects are currently serving over 2 million of population in the same area, many of which having water connectivity at home for the first time.

Hitesh Arora, Managing Director, Rean Water, said, “Rean WaterTech is a fast-growing water company uniquely positioned and only triple bottom line ethos Water Company of India. Rean is committed to cater to bottom of pyramid population of the country with potable piped water supply in association with the Government. It’s our pleasure to fast-track our journey on high socio-environment impact business with support through the Social Bond from responsAbility. It’s a major milestone towards our faster and sustainable growth. We are committed to strengthening our team, expand geographically for faster business acquisitions while continue to move upward on ESG performance and deliver to stakeholders.”

Brandon Cheah, Investment Specialist Health/WASH, responsAbility, said, “We like Rean Water’s outstanding expertise in this segment and their commitment to water accessibility. The Company has over the years connected many households with drinking water, and we are partnering the Company to further improve rural population access to piped water, an essential resource to livelihood. Through the Social Bond, therefore, we are mobilizing private capital to facilitate a more equitable distribution of water.”

Simmi Sareen, Director, Unitus Capital, said, "Solving the water management challenge has become the need of the hour in India, with the demand for water continuing to grow. Through its integrated water solutions, superior execution, and exemplary track record, Rean is creating significant on-ground impact. We are proud to partner with Rean on this transaction with responsAbility, to enable further growth and impact opportunities.”

The Social Bond, which has made this financing possible, speaks to the urgency that Covid-19 has created to achieve the United Nations' 17 Sustainable Development Goals (SDGs). Even before the pandemic, both pace and scale were lacking. Underlying the Social Bond is the belief that targeted private investment can significantly advance the SDGs. However, the mobilization of private capital often fails due to the risk aversion and return orientation of private investors. Conceived as a social bond, the initiative makes a measurable contribution to the SDGs and combines this development impact with interest rates in line with the market. In this way, it hints at the potential for promoting sustainable development that the mobilization of private capital can unleash.

The Social Bond mobilizes private capital for the following of the United Nations' 17 development goals:

About Rean WaterTech Rean Water is a unique water company which work on design-build-operate (DBO) model exclusively focused on executing water and wastewater projects in India. Their project portfolio execution includes design-engineering, procurement, water pipe laying and installation, protective coating services, building water treatment plant, last mile connectivity to households, refurbishment of infrastructure, undertaking other allied civil works involved in water projects, long term operations and maintenance. They specialised in project development located in rural areas in which household water connectivity are at the lowest. The company is led by a team with decades of experience in water projects and environmental solutions. It has a proven track record in completing multiple water projects for the government, most of which are backed by development agencies and multilateral institutions and have several outstanding projects in development within the portfolio. It has continued to deliver to stakeholders throughout the Covid-19 pandemic period.

About responsAbility Investments AG responsAbility is a leading impact asset manager who designs investment products that make the world more sustainable. Since our inception in 2003, we have been investing in growth markets, directing capital where it is scarce, and targeting both measurable positive impact and attractive financial returns. Currently, responsAbility manages USD 3.5 billion in assets invested in over 300 ESG-vetted high-impact companies in 76 countries. The novel Social Bond follows a USD 175 million securitization of microfinance loans successfully completed in 2019. Since inception, funds managed by responsAbility have provided over USD 11 billion in debt and equity financing to companies active in the areas of climate finance, financial inclusion, and sustainable food whose business models directly contribute to the United Nations Sustainable Development Goals (SDGs).

responsAbility is headquartered in Zurich, Switzerland, with offices in Bangkok, Lima, Mumbai, Nairobi, Paris and Tbilisi. The company's shareholders include its own employees as well as various renowned Swiss and international financial institutions. responsAbility is authorized by the Swiss Financial Market Supervisory Authority FINMA.

About Unitus Capital Unitus Capital is an impact-focused investment bank facilitating access to capital for businesses to scale, innovate, & deliver deep social and environmental impact. Since 2008, Unitus has helped raise over USD 3 Billion for financial inclusion, cleantech, agriculture, women empowerment, education, and healthcare. Unitus Capital is headquartered in Bangalore and with representation in New York, San Francisco, and Sydney.

Media Contact Marco Zanchi responsAbility Investments +41 44 403 06 18 marco.zanchi@responsAbility.com Gautam BasuRean Water +91 77 7097 8611 gb@rean.co.in Vikas Sarda Unitus Capital +91 80 6723 6400 info@unituscapital.com

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This information was produced by responsAbility Investments AG together with its partners to the best of its knowledge and belief. However, responsAbility Investments AG provides no guarantee with regards to its content and completeness and does not accept any liability for losses which might arise from making use of this information. The opinions expressed in this information material are those of responsAbility Investments AG at the time of writing and are subject to change at any time without notice. If nothing is indicated to the contrary, all figures are unaudited. This material is provided for information purposes only. It does not constitute an offer or a recommendation to buy or sell financial instruments or services and does not release the recipient from exercising his/her own judgment. It is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under local law.

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