L&T Infrastructure Finance Company Ltd (LTIF) has received the first tranche of 50 million dollars of the total 100 million external commercial borrowing loan from Asian Infrastructure Investment Bank (AIIB), a multilateral development bank that invests in sustainable infrastructure.
The development marks AIIB's first loan to a non-banking financial company (NBFC) in India.
The loan proceeds will be used to on-lend to large and mid-scale wind and solar power infrastructure projects in India. LTIF's collaboration with AIIB will also help the company bolster its environmental and social capabilities, which will enable it to tap the international market for green finance, in the future.
The proposed financing supports AIIB's sustainable energy for Asia strategy and strategy on mobilising private capital for infrastructure. L&T Infrastructure Finance is a leading arranger and financier of renewable energy in India.
With the closure of this financing deal with AIIB, LTIF has further diversified its long-term funding sources.
"Investments from an orgsation like AIIB, that follows a stringent due diligence process of the company's capacity, viability, past performance and regulatory compliances before any investments, reiterates our commitment to green project financing," said Dinanath Dubhashi, Managing Director and CEO of L&T Finance Holdings.
"Our lending to clean energy goes beyond the actual book and we have today built an ecosystem for all stakeholders to be a part of the green energy initiative. We firmly believe that renewable power holds great potential in fighting the dual challenge of climate change and the ever-growing demand for energy," he said in a statement on Tuesday.
LTIF has initiated the establishment of an environmental and social monitoring system that will be expanded to include screening, categorising, appraisal, contracting and monitoring of subprojects supported by AIIB in accordance with the AIIB Environmental and Social Standards.
( With inputs from ANI )