New Delhi: The Asian Development Bank (ADB) has sanctioned a loan of $500 million to bolster India's economic development through the creation of environmentally sustainable infrastructure.
This initiative is in line with India's climate objectives and seeks to meet the increasing demand for infrastructure capable of withstanding the impacts of climate change.
Sanjeev Kaushik, Principal Finance Sector Specialist at ADB, underscored the necessity of strong infrastructure for India's economic advancement.
"India's economy ranks among the fastest-growing globally. A key element of this growth is the establishment of resilient infrastructure that aligns with the nation's climate goals. ADB is enhancing its support to the government to ensure that India's economic growth is both inclusive and sustainable," he stated.
ADB also pointed out that India is one of the most climate-vulnerable economies in the world, experiencing frequent floods, droughts, and cyclones.
These challenges necessitate infrastructure designed to reduce climate risks. Furthermore, ADB noted that the country faces a substantial climate financing gap of USD 1 trillion, which cannot be filled by the public sector alone.
The loan, which is secured by a sovereign guarantee, will be allocated to India Infrastructure Finance Company Limited (IIFCL). This funding will empower IIFCL to provide long-term capital for infrastructure initiatives in key sectors such as connectivity, energy transition, urban development, education, and healthcare.
IIFCL is anticipated to be instrumental in encouraging private sector involvement by serving as the primary government investor within a consortium of lenders. This collaborative strategy is designed to mobilize additional resources for the development of sustainable infrastructure.
In alignment with the Financing Environmentally Sustainable Growth in Infrastructure Project, IIFCL will strengthen its institutional capabilities to incorporate green practices into its initiatives.
To ensure the success of these efforts, a sustainability unit, an environmental sustainability framework, and a project sustainability scoring system will be created.
Founded in 1966, ADB is comprised of 69 member countries, with 49 of them located in the region.
