L&T Infrastructure Finance gets $100 million loan from AIIB for renewable energy projects.
The Beijing-based Asian Infrastructure Investment Bank (AIIB) will provide a 100 million dollar (about Rs 700 crore) loan to L&T Infrastructure Finance Company for wind and solar infrastructure projects in India.
“The loan proceeds will be used to on-lend to wind and solar power infrastructure projects throughout India,” the AIIB said, adding it is the first time that the multilateral development bank is extending a loan to a non-banking finance company.The loan mobilises private capital from sponsors, other financiers, and LTIF’s own sources
L&T Infrastructure Finance is a subsidiary of L&T Finance Holdings Ltd and a leading non-bank financier of renewable energy in India.
“AIIB’s financing will help secure the funding supply for renewable energy project development in India,”
said AIIB Vice President and Chief Investment Officer DJ Pandian.
“The project supports AIIB’s commitment to sustainable energy for Asia to reduce the carbon intensity of energy supply,” he said in a statement.
L&T Infrastructure Finance’s collaboration with AIIB will also help the company develop its environmental and social capabilities which will in the future enable it to tap the international market for green finance.
India is committed to reducing its carbon intensity by 30 to 35 per cent of 2005 levels by 2030 under the Paris Agreement. The country will need to increase the share of non-fossil fuels in its energy mix if it is to achieve this target.
Investment in renewable energy is an efficient way for India to reduce its carbon intensity while meeting its growing energy needs. Non-banking finance companies play a crucial role in broadening access to financial services, enhancing competition and diversity in the financial sector.
AIIB is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, it began operations in January 2016 and has now grown to 97 approved members worldwide. (ANI)