The European Investment Bank (EIB) has granted a long-term loan of EUR 200 million to India Infrastructure Finance Company Ltd (IIFCL) to help finance projects that will contribute to the mitigation of climate change in India.
The main objective of this Framework Loan is to make long-term finance available for investments in the renewable energy, energy efficiency and any other relevant sectors that reduce CO2 in India. The loan will be provided to IIFCL for on-lending to private companies for small, medium-sized and some large projects, the European Commission said in a press release on Tuesday.
The operation will contribute to climate change mitigation by using renewable energy sources and energy efficiency enhancements, which are priorities for EIB lending, to prevent or reduce greenhouse gas emissions.
The Framework Loan will support the EU-India Strategic Partnership in the area of climate change, fostering the development of renewable energy and the efficient use of energy. It will also contribute to meeting energy demand and thus encourage economic growth and development in India.
The project schemes will be identified and presented by IIFCL. The EIB will ensure that all projects are economically and financially viable, technically adequate and in compliance with the Bank's social and environmental standards and Guide to Procurement. The long-term loan will be repaid in installments over the next 20 years. The EIB finance will cover up to 50 percent of the total project cost.
This is the sixth operation of its kind in India and the Bank's first lending operation with IIFCL, a government entity that promotes infrastructure investments. This loan is being provided under the EUR4.5 billion Energy Sustainability and Security of Supply Facility.
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