Indian Government and ADB Finalize $500 Million Loan for Eco-Friendly Infrastructure Initiatives
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New Delhi, Dec 23 (NationPress) The Indian government and the Asian Development Bank (ADB) officially concluded a $500 million loan agreement on Monday aimed at promoting green and sustainable infrastructure projects that are in line with the nation’s climate obligations.
This ADB loan, which carries a sovereign guarantee, will be directed to the India Infrastructure Finance Company Limited (IIFCL).
According to Mio Oka, Country Director for ADB, “ADB financing will assist IIFCL in providing long-term capital for infrastructure projects that emphasize connectivity and energy transition, as well as underfunded sectors such as urban development, education, and healthcare.”
To fulfill its net-zero targets, India requires substantial private capital investments, which will necessitate innovative financing solutions and risk-mitigation strategies to tackle inherent sector risks and market discrepancies.
The Ministry of Finance noted that IIFCL, as a strategic development finance institution, is well-positioned to address these challenges.
Over the years, ADB has collaborated closely with IIFCL to enhance its operational and risk management capabilities. As IIFCL continues to grow, its operations are increasingly focused on attracting private sector resources, which calls for a broader range of product offerings for potential institutional investors.
The initiative aims to strengthen IIFCL’s institutional capacity to incorporate green practices and best methodologies into infrastructure projects. Additionally, a sustainability unit and an environmental sustainability framework will be established to evaluate the sustainability ratings of these projects, as outlined by the ministry.
Just last week, the Indian government and ADB signed a $350 million policy-based loan agreement under the second sub-program of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) program, which is designed to enhance the domestic manufacturing sector and bolster supply chain resilience.
As stated by the Ministry of Commerce and Industry, the SMILE program is a strategic policy-based loan (PBL) aimed at supporting the government in implementing comprehensive reforms in India’s logistics sector.
