Partnership for Sustainable Growth

The Government of India and the Asian Development Bank (ADB) have recently signed an agreement for a $500 million loan aimed at supporting green and sustainable infrastructure projects that align with India's climate commitments. This significant financial support, backed by a sovereign guarantee, will be extended to the India Infrastructure Finance Company Ltd (IIFCL), as announced by the finance ministry on Monday.

The agreement was signed by Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, representing the Government of India, and Country Director Mio Oka for ADB. "ADB's financing will enable IIFCL to provide long-term capital for infrastructure projects focusing on connectivity and energy transition, as well as under-resourced sectors such as urban projects, education, and healthcare," stated Oka.

To achieve its net-zero commitments, India requires substantial private capital investment, necessitating innovative financing platforms and risk-mitigation instruments to address inherent sector risks and market asymmetries. As a strategic development finance institution, IIFCL is well-positioned to meet these needs. Over the years, ADB has collaborated closely with IIFCL to enhance its operational and risk management capacities.

The project will also build IIFCL's institutional capacity to integrate green and best practices into infrastructure projects. A sustainability unit and an environmental sustainability framework and scoring method to assess the sustainability rating of projects will be established.