IFC, Axis Bank partner on $500 million blue finance loan to boost India’s green projects

New Delhi: The International Finance Corporation (IFC), the soft loan window of the World Bank, has partnered with Axis Bank to provide a $500 million loan to scale up green project financing in India, the IFC said on Monday.

The collaboration marks the IFC’s first-ever blue investment in India and the country’s inaugural blue loan issued by a financial institution.

Blue finance, an emerging area in climate finance, targets investments water management, marine ecosystem restoration, sustainable shipping and renewable energy.

Also read: From growth at all costs to sustainable growth: the maturing of Indian startups

“We are thrilled to announce our inaugural blue loan in India, and our largest climate finance initiative in the country to date,” said IFC managing director Makhtar Diop.

“India serves as an exceptional testing ground for innovative approaches to climate adaptation. This loan will catalyze private sector investment in this emerging asset class and foster a sustainable blue economy," Diop added.

Climate-focused lending

This loan is the IFC’s largest such financing in India, providing Axis Bank with capital to expand its climate-focused lending.

India's water and wastewater treatment market is expected to grow from $1.6 billion in 2022 to $3 billion by 2029, and the green building sector is projected to present a $1.4 trillion investment opportunity by 2030, the statement said.

Also read: Shallow thinking about water imperils the planet

“We share IFC’s vision of strengthening standards and lending practices to boost sustainable finance in India," said Axis Bank’s Managing Director and CEO, Amitabh Chaudhry.

"This partnership will help Axis Bank grow its climate and sustainable finance portfolios while addressing the impacts of climate change," he added.

As part of the partnership, IFC will also provide Axis Bank with advisory services, focusing on expanding its green building portfolio, including affordable housing projects, and building capacity for impact reporting.

Also read: Raising the stakes on climate funding – the significance of blended finance

"IFC will also offer a performance-based incentive of up to $2.9 million through the UK-IFC Market Accelerator for Green Construction (MAGC) program to support green building design and construction, certified under IFC’s EDGE (Excellence in Design for Greater Efficiencies) standard," the statement added.