On 20 December 2024, the Government of India and the Asian Development Bank (ADB) signed a $500 million loan agreement to support sustainable infrastructure projects in alignment with India’s climate commitments. The loan, extended with a sovereign guarantee, will be channelled through the India Infrastructure Finance Company Limited (IIFCL).
The agreement, titled the Financing Environmentally Sustainable Growth in Infrastructure Project, was signed by Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, for the Government of India, and Mio Oka, Country Director for ADB.
ADB’s financial assistance aims to bolster IIFCL’s capacity to provide long-term capital for infrastructure projects with a focus on energy transition, connectivity, and under-resourced sectors such as urban development, education, and healthcare.
“This financing will enable IIFCL to deliver much-needed capital for critical infrastructure projects, fostering sustainable development while addressing key sectoral gaps,” said Mio Oka.
The project includes measures to enhance IIFCL’s institutional capacity to integrate green practices and sustainability benchmarks into infrastructure development. This involves establishing a dedicated sustainability unit, an environmental sustainability framework, and a scoring method to evaluate the sustainability rating of projects.
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India’s commitment to achieving net-zero emissions necessitates significant private capital investment. However, this requires innovative financing mechanisms and risk-mitigation strategies to address inherent market challenges. As a strategic development finance institution, IIFCL is well-positioned to mobilise resources and expand its offerings to attract private sector investments.
Over the years, ADB has collaborated with IIFCL to strengthen its operational and risk management capacities. This partnership aims to further align IIFCL’s operations with green infrastructure priorities, leveraging private sector participation to meet India’s developmental goals.
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