India Signs $500M Loan with ADB to Advance Green Infrastructure Development

The initiative aligns with India’s climate commitments and aims to catalyze private sector participation in crucial sectors like energy, urban development, education, and healthcare.

The Government of India and the Asian Development Bank (ADB) have signed a $500 million loan agreement to bolster green and sustainable infrastructure projects across the country. The initiative aligns with India’s climate commitments and aims to catalyze private sector participation in crucial sectors like energy, urban development, education, and healthcare.

The agreement was formalized between Ms. Juhi Mukherjee, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Government of India, and ADB Country Director Mio Oka in New Delhi.

The loan, backed by a sovereign guarantee, will be extended to the India Infrastructure Finance Company Limited (IIFCL) to:

Provide long-term capital for infrastructure projects that support India’s energy transition and connectivity goals.

Address financing gaps in under-resourced sectors such as urban development, healthcare, and education.

Foster private capital investments to meet the country’s ambitious net-zero commitments.

ADB Country Director Mio Oka emphasized the critical role of the financing: “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,” she said.

Institutional Capacity Building at IIFCL

The loan also focuses on enhancing the institutional capabilities of IIFCL, a key development finance institution in India. The project will:

Establish a sustainability unit within IIFCL.

Develop an environmental sustainability framework and scoring method to evaluate project sustainability ratings.

Integrate global best practices into infrastructure planning and execution, aligning with green financing principles.

Mobilizing Private Sector Resources

To achieve India’s net-zero targets, significant private investment is essential. The ADB-backed initiative will support IIFCL’s evolution by expanding its product offerings to attract institutional investors while addressing sectoral risks and market asymmetries.

ADB’s continued collaboration with IIFCL has been pivotal in developing robust operational and risk management capacities. This project builds on that partnership to ensure infrastructure projects adhere to environmental sustainability goals while leveraging private sector participation.

Broader Impact and Future Goals

Energy Transition: The loan supports India’s goal of accelerating the transition to renewable energy sources, reducing reliance on fossil fuels, and enhancing grid infrastructure.

Urban Development: Investment in urban infrastructure will focus on smart cities, public transportation, and sustainable waste management systems.

Healthcare and Education: Financing will target healthcare facilities and educational infrastructure to improve access and quality, particularly in underserved regions.

A Step Towards Climate Resilience

This agreement underscores India’s commitment to sustainable development and climate resilience. By fostering green infrastructure projects and mobilizing private capital, the initiative will significantly contribute to India’s sustainable growth trajectory while addressing pressing environmental and social challenges.

The partnership between ADB and IIFCL reflects a shared vision of building a greener and more inclusive future for India.