The Asian Development Bank (ADB) has sanctioned a $500 million financial intermediation loan to India to finance environmentally sustainable infrastructure development in the country. The ADB approved the loan on 12 December 2024.

Loan to IIFCL with Sovereign Guarantee

The $500 million loan has been granted to India Infrastructure Finance Company Limited (IIFCL), owned by the government of India.

The loan has a sovereign guarantee. It means that if IIFCL fails to repay the loan to the ADB, then the government of India will repay the loan to ADB on behalf of the IIFCL.

Use of the Loan amount

The IIFCL will use the loan amount to provide loans to both greenfield (new projects) and brownfield (existing projects) sustainable infrastructure projects.
The special focus will be on providing finance for the connectivity and energy transition and sectors like urban projects, education, and health care.
The loan amount will be used to build the institutional capacity of IIFCL to integrate green technology and best practices into infrastructure projects.

Climate Financing Gap in india

According to the ADB, India is among the world’s most impacted economies due to climate change and hazards like floods, droughts, and cyclones.

India needs to invest huge amounts in environmentally sustainable infrastructure to deal with such extreme climate-related events.

However India faces a $1 trillion climate financing gap to build such infrastructure.

About IIFCL

The India Infrastructure Finance Company Limited (IIFCL) is a wholly owned company of the government of India, which was set up in 2006.

It is registered as a Non-Banking Finance Company-Non Deposit-taking Infrastructure Financing Company( NBFC-ND-IFC) with the Reserve Bank of India.

The Reserve Bank of India regulates it.

IIFCL provides long-term loans to viable infrastructure projects.

It provides loans to both greenfield (new projects) and brownfield (existing projects) projects in transportation, energy, water, sanitation, communication, and social and commercial infrastructure sectors.

Headquarters: New Delhi

Managing Director: Padmanabhan Raja Jaishankar

Asian Development Bank(ADB)

Asian Development Bank is a regional development bank of the Asia Pacific region with 69 member countries.

It was established in 1966 and has its headquarters in Mandaluyong City, Metro Manila, Philippines.

Also Read: $50 million ADB loan for Meghalaya’s Water Harvesting Project

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