New Delhi: The Central government and the Asian Development Bank (ADB) on Monday signed a $500 million loan to support green and sustainable infrastructure projects aligned with the country’s climate commitments.
The ADB loan, with a sovereign guarantee, will be extended to the India Infrastructure Finance Company Limited (IIFCL).
“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 Mio Oka, Country Director for ADB.
To meet its net-zero commitments, the country needs immense private capital investment that will require innovative financing platforms and risk-mitigation instruments to address inherent sector risks and market asymmetries.
As a strategic development finance institution, IIFCL is well-suited to meet these needs, said the Ministry of Finance.
ADB has worked closely with IIFCL over the years to develop its operational and risk management capacities. As IIFCL has developed and evolved, its operations are increasingly geared toward leveraging private sector resources that necessitate the expansion of its product offerings for potential institutional investors.
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 ministry added.
Last week, the Indian government and the ADB signed an agreement for a $350 million policy-based loan under the second subprogramme of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) programme, to strengthen the domestic manufacturing sector and improve the resilience of supply chains.
According to the Ministry of Commerce and Industry, the SMILE programme is a programmatic policy-based loan (PBL) to support the government in undertaking wide-ranging reforms in the logistics sector in India.
(IANS)
