IFC join hands with Axis Bank to provide a $500 Mn Climate loan in India
The climate loan aim to promote sustainable growth, create jobs and finance green/blue projects.
The International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution, is partnering with Axis Bank, one of the largest private sector banks in India, to provide a $500 million loan to help develop a blue finance market and scale up financing of green projects in India.
This is IFC’s first blue investment in India and the first blue transaction by a financial institution in the country. Blue loans are financing instruments that raise and earmark funds for investments such as water and wastewater management, reduction of marine plastic pollution, restoration of marine ecosystems, sustainable shipping, eco-friendly tourism, and offshore renewable energy.
This transaction is also the largest green financing by IFC in the country. The funding will enable Axis Bank to expand its climate finance portfolio.
With India’s rapid urbanization and economic growth, there is a substantial opportunity to enhance water and energy efficiency. The water and wastewater treatment market size were estimated at $1.6 billion as of 2022 and is expected to reach $3 billion by 2029. Additionally, the green buildings sector presents an investment opportunity of $1.4 trillion by 2030, driven by a need for sustainable infrastructure. Most of these investments need to come from the private sector to offset limited public funding.
As part of its advisory services, IFC will support Axis Bank in growing its green buildings portfolio, including for affordable housing projects and building capacity for impact reporting. Through this engagement, IFC aims to catalyse the green buildings’ market in India. IFC will also provide a performance-based incentive of up to $2.9 million from the UK-IFC Market Accelerator for Green Construction (MAGC) program aimed at supporting the design and construction of green buildings certified by IFC’s EDGE (Excellence in Design for Greater Efficiencies) green buildings standard.
Speaking on the occasion, Amitabh Chaudhry, Managing Director and Chief Executive Officer of Axis Bank said, “With the increasing effects of climate change into the global ecosystem and the growing awareness of environment sustainability, it’s imperative for banks to adopt sustainable lending practices. We are excited to partner with IFC with whom we share a common vision of strengthening standards and lending practices to boost sustainable finance in India. Given Axis Bank’s focus on growing its climate and sustainable finance portfolios, along with its large size, systemic importance, and wide reach, we hope to be a strong and stable partner for IFC in the key focus area of climate finance in India.”
“We are thrilled to announce our inaugural blue loan in India, marking our largest climate finance initiative in the country to date. India serves as an exceptional testing ground for innovative approaches to climate adaptation. This loan will not only catalyse private sector investment in this emerging asset class but also direct long-term funding toward fostering a sustainable blue economy. Additionally, it aims to enhance financing for climate projects across India, with a strong emphasis on green buildings that will mitigate climate change impacts and generate jobs. Partnering with Axis Bank, a like-minded ally, we are committed to propelling India’s sustainable and inclusive growth forward,” said Makhtar Diop, Managing Director of IFC.
The climate loan aim to promote sustainable
