The Government of India and the Asian Development Bank (ADB) have signed a $500 million (approximately ₹4,250 crore) loan agreement to bolster green and sustainable infrastructure projects in India. This initiative aligns with India’s commitment to achieving its climate goals. According to a statement by the Ministry of Finance, the loan, backed by a sovereign guarantee, will be channelled through the India Infrastructure Finance Company Ltd. (IIFCL).

Agreement signatories and objectives

The agreement was signed by Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, representing the Government of India, and Mio Oka, Country Director for ADB. Mio Oka emphasised that ADB’s financing would enable IIFCL to provide long-term capital for infrastructure projects focusing on critical areas such as connectivity, energy transition, urban development, education, and healthcare.

Bridging the gap for net-zero commitments

Achieving India’s net-zero targets requires substantial private capital investment, necessitating innovative financial platforms and risk mitigation tools to address sector-specific risks and market imbalances. As a strategic development finance institution, IIFCL is well-positioned to meet these challenges by mobilising private resources and expanding its product offerings for institutional investors.

Strengthening IIFCL’s capabilities

ADB has played a pivotal role in enhancing IIFCL’s operational and risk management capabilities over the years. As IIFCL evolves, its operations are increasingly designed to attract private sector participation, further boosting its ability to finance sustainable infrastructure projects.

Integrating sustainability into infrastructure

The project aims to enhance IIFCL’s institutional capacity by incorporating green and sustainable practices into infrastructure development. A dedicated sustainability unit will be established, along with an environmental sustainability framework and a scoring system to evaluate the sustainability ratings of projects.

Building a green future

This partnership between India and ADB underscores a shared commitment to fostering sustainable growth while addressing the urgent need for climate-resilient infrastructure. The initiative is a step forward in creating a greener, more sustainable future for the nation.