India’s Tata Steel Ltd. is in talks to raise as much as $400 million, according to people familiar with the matter, in what could become the company’s first green loan.

The debt could have a tenor of about five years and the proceeds would be used for capital expenditure, said the people, who declined to be named because the matter is private. The lenders include Bank of America Corp., HSBC Holdings Plc, JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group Inc.

No final decision has yet been taken and details may still change, according to the people. Bloomberg-compiled data indicate this would be Tata Steel’s first green loan.

Steelmaking is carbon intensive and the sector will require fresh financing to improve its environmental footprint. A global shift to low-emissions productions would require outlays of about $4.4 trillion over the next 30 years, according to a 2022 McKinsey Quarterly report.

Tata Steel lags its peers on several environmental metrics, including greenhouse gas emissions, air quality, and water and waste management, according to data compiled.

Tata Steel Limited is an Indian multinational steel company headquartered in Mumbai, Maharashtra, with its headquarters in Jamshedpur, Jharkhand. It is a subsidiary of the Tata Group.

Tata Steel, formerly known as Tata Iron and Steel Company Limited (TISCO), is one of the world's largest steel producers, with an annual crude steel capacity of 34 million tonnes. It is one of the most geographically diverse steel producers in the world, with operations and commercial presence all over the world.