New Delhi [India], December 12 : The Asian Development Bank (ADB) has approved a USD 500 million loan to support India's economic growth through the development of environmentally sustainable infrastructure.
This initiative aligns with India's climate commitments and aims to address the growing need for infrastructure that can withstand the challenges posed by climate change.
Sanjeev Kaushik, Principal Finance Sector Specialist at ADB, emphasised the importance of robust infrastructure for India's economic progress.
"India's economy is one of the fastest-growing in the world. Critical to this process is robust infrastructures that align with the country's climate commitments. ADB is strengthening support to the government to ensure that India's economic development will be inclusive and sustainable," he said.
ADB also highlighted that India is among the most climate-affected economies globally, facing frequent floods, droughts, and cyclones.
These challenges demand infrastructure designed to mitigate climate risks. However, ADB also noted that the country faces a significant USD 1 trillion climate financing gap, which the public sector alone cannot bridge.
The loan, backed by a sovereign guarantee, will be provided to India Infrastructure Finance Company Limited (IIFCL). This funding will enable IIFCL to offer long-term capital for infrastructure projects focusing on critical areas such as connectivity, energy transition, urban development, education, and healthcare.
IIFCL is expected to play a pivotal role in attracting private sector participation by acting as the anchor government investor in a consortium of lenders. This collaborative approach aims to bring in more resources for sustainable infrastructure development.
As part of the Financing Environmentally Sustainable Growth in Infrastructure Project, IIFCL will enhance its institutional capacity to integrate green practices into its projects.
A sustainability unit, an environmental sustainability framework, and a project sustainability scoring system will also be established to ensure the effectiveness of these initiatives.
ADB was established in 1966, it is owned by 69 members out of which 49 are from the region.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor