IFC Partners with Bajaj Finance to Drive Climate Finance for EVs, EECG, and Women-Empowerment in India

IFC’s Investment Aims to Accelerate India’s Low-Carbon Transition and Empower Women Entrepreneurs, with Bajaj Finance Targeting $600 Million in Outstanding Climate Loans by 2027.

In a move to expand climate finance for electric vehicles (EVs), energy-efficient consumer goods (EECG), and to bolster support for women-owned microenterprises in India, the International Finance Corporation (IFC) has invested $400 million in Bajaj Finance Limited (BFL). This investment forms part of BFL’s $1 billion fundraising goal, underscoring a mutual commitment to advancing climate goals and promoting financial inclusion.

BFL, a leading non-banking finance company in India under Bajaj Finserv Ltd, has made strides in the EV and EECG markets, aiming to support India’s shift towards sustainable development. The IFC loan will allow BFL to extend financing options to customers purchasing EVs—including two-wheelers, three-wheelers, and four-wheelers—thereby contributing to the wider adoption of clean transportation alternatives. Additionally, the partnership will empower BFL to fund and facilitate more women-owned microenterprises and support women micro-borrowers, furthering the country’s inclusive growth agenda.

BFL’s Chief Financial Officer and Chief Operating Officer, Sandeep Jain, emphasized the significance of IFC’s funding as a milestone in the company’s sustainability journey. "Responsible business practices, driven by our ESG principles, are foundational to how we do business. IFC’s $400 million investment acts as a catalyst, helping us diversify our financing sources and quadruple our climate loan portfolio to $600 million by 2027,” Jain said. “This partnership will increase access to EVs, promote energy-efficient consumer goods, and provide critical support to women-owned enterprises, all aligning with India’s goals of inclusivity and low-carbon development.”

The collaboration with IFC is timely, as India—the third-largest energy consumer worldwide—is expected to see a substantial increase in demand for EVs and energy-efficient household appliances over the coming decades. The household appliance market in India is projected to reach $59.19 billion by 2024, with an annual growth rate of 7.35 percent. EECGs will play a central role in India’s low-carbon development by reducing energy consumption, with the potential to curb emissions from households, which currently contribute to 25 percent of the country’s electricity consumption. While India’s Bureau of Energy Efficiency oversees a Star Label program to rate the efficiency of appliances, widespread adoption of EECG is yet to be achieved.

For India to meet its climate goals, increased consumer awareness around EECG adoption is essential. The current adoption rate of highly efficient appliances remains low, with only 26 percent of products in mandatory categories rated 4 or 5 stars. By improving financing options and awareness, IFC and BFL aim to increase the adoption of energy-efficient goods across Indian households, helping reduce carbon emissions and save on electricity costs.

In addition to climate-focused products, the partnership highlights EVs as a key sector for India’s decarbonization, particularly as transportation contributes about 12 percent of the country’s total emissions. By supporting affordable financing for EVs, BFL and IFC aim to reduce high upfront costs and minimize risk perceptions, barriers that currently hinder widespread EV adoption.

The collaboration also emphasizes financial support for women-owned microenterprises and micro-borrowers, a critical component for India’s inclusive economic growth. Women-owned microenterprises represent a significant portion of India’s 63 million micro, small, and medium enterprises (MSMEs). Expanding access to credit for these enterprises is expected to enhance income opportunities for women entrepreneurs and contribute to economic resilience within local communities.

IFC’s Regional Director for South Asia, Imad N. Fakhoury, underscored the importance of this partnership in meeting India’s climate targets while driving social equity. “IFC’s investment in Bajaj Finance supports market competitiveness, demonstrating how climate financing can accelerate the shift toward energy-efficient solutions and e-mobility,” Fakhoury noted. “Together, we are committed to green growth, empowering women, and contributing to India’s journey toward a sustainable, inclusive future.”

This initiative between IFC and BFL reflects a growing trend among financial institutions to channel capital into climate-smart ventures, particularly those that uplift women and underserved groups. As India strives to achieve its net-zero emissions target by 2070, this partnership signals a proactive approach to sustainable development, combining environmental and social objectives to create long-lasting impact.