India, ADB sign USD 500 million loan to support green, sustainable infrastructure projects
Dec 24, 2024
New Delhi [India], December 24 : India and the Asian Development Bank (ADB) signed a USD 500 million loan to support green and sustainable infrastructure projects aligned with the country's climate commitments.
The agreement was inked on December 20 and the ADB loan, with a sovereign guarantee, will be extended to the India Infrastructure Finance Company Limited (IIFCL), according to a statement by the Union Finance Ministry. Signatories to the Financing Environmentally Sustainable Growth in Infrastructure Project were Juhi Mukherjee Joint Secretary, Department of Economic Affairs, Ministry of Finance, for the Government of India, and Country Director Mio Oka for ADB.
Mia Oka said, "ADB financing will help IIFCL provide long-term capital for infrastructure projects focusing on connectivity and energy transition as well as under-resourced sectors like urban projects, education, and health care."
In a press release, Ministry of Finance stated, "To meet its net-zero commitments, the country needs immense private capital investment that will require innovative financing platforms and risk-mitigation instruments to address inherent sector risks and market asymmetries. As a strategic development finance institution, IIFCL is well-suited to meet these needs."
Last week, the central government and the Asian Development Bank (ADB) signed a USD 350 million policy-based loan under the second subprogram of Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) program.
The Ministry of Commerce and Industry in an official statement stated that this policy-based loan aims to expand India's manufacturing sector and improve the resilience of its supply chainsThe signatories to the loan agreement were Department of Economic Affairs (DEA), Ministry of Finance; Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry; and the ADB.
The SMILE program is a programmatic policy-based loan (PBL) to support the government in undertaking wide-ranging reforms in the logistics sector in India.The programmatic approach comprises two subprograms, which aim to expand India's manufacturing sector and improve the resilience of its supply chains.
The program establishes and operationalizes a comprehensive policy framework to enhance logistics efficiency through strengthening the institutional bases for multimodal logistics infrastructure development at the national, state, and city levels.
The ministry also noted that it will also help in standardizing warehousing and other logistics assets to strengthen supply chains and incentivize greater private sector investment, improving efficiencies in external trade logistics and adopting smart systems for efficient and low emission logistics.
The development of India's logistics sector is vital to enhancing the competitiveness of its manufacturing sector.Through strategic policy reforms, infrastructure development, and digital integration, ongoing reforms are poised to transform the logistics landscape.
