The Union government and the Asian Development Bank (ADB) signed a $500-million loan on December 20, with a target to support green and sustainable infrastructure projects aligned with India’s climate commitments.
The loan from ADB, with a sovereign guarantee, will be extended to the India Infrastructure Finance Company Limited (IIFCL), according to a government statement on December 23.
The project will build the institutional capacity of IIFCL to integrate green and best practices into the infrastructure projects. A sustainability unit and an environmental sustainability framework and scoring method to assess the sustainability rating of the projects will also be established, the statement added.
“ADB financing will help IIFCL provide long-term capital for infrastructure projects focusing on connectivity and energy transition as well as under-resourced sectors like urban projects, education, and health care,” said Mia Oka, Country Director for ADB.
To meet its net-zero commitments, India needs "immense private capital investment that will require innovative financing platforms and risk-mitigation instruments to address inherent sector risks and market asymmetries," and as astrategic development finance institution, IIFCL is well-suited to meet these needs, according to the statement.
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