Larsen & Toubro Infra Finance gets $50 million from AIIB for renewable energy funding
The loan proceeds will be used to on-lend to large and mid-scale wind and solar power infrastructure projects in India
L&T Infrastructure Finance Company (LTIFCL) has received the first tranche of $50 million of the total $100-million ECB loan from the Asian Infrastructure Investment Bank (AIIB).
AIIB is a multilateral development bank that invests in sustainable infrastructure.
This development marks AIIB's first loan to a non-banking financial company (NBFC) in India, said the wholly-owned subsidiary of L&T Finance Holdings Ltd.
The loan proceeds will be used to on-lend to large and mid-scale wind and solar power infrastructure projects in India.
LTIFCL'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, it said in a release.
With the closure of this financing deal with AIIB, LTIFCL has further diversified its long-term funding sources.
Dinanath Dubhashi, MD & CEO, L&T Finance Holdings, said, "Investments from an organisation like AIIB, which 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.
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.
He said the company believes that renewable power holds great potential in fighting the dual challenge of climate change and the ever-growing demand for energy.
LTIFCL said it has initiated the establishment of an environment and social monitoring system that will be expanded to include screening, categorising, appraisal, contracting and monitoring of sub-projects supported by AIIB in accordance with the AIIB Environmental and Social Standards.