AIIB Grants $100 mn to L&T Finance arm for Green Energy Funding

AIIB will provide $100 million in loans to L&T Infrastructure Finance Company for on-lending to green energy infrastructure projects in the country.

Beijing-headquartered multi-lateral developmental lender Asian Infrastructure Investment Bank (AIIB) recently announced that it will provide $100 million in loans to L&T Infrastructure Finance Company for on-lending to green energy (wind and solar power) infrastructure projects in India.

This deal with the arm of L&T Finance Holdings marks the bank’s first loan to a non-banking finance company (NBFC).

“Our latest project will increase the supply of renewable energy in India by mobilising private capital. The loan proceeds of USD 100 million will be used to on-lend to wind and solar power infrastructure projects in India,” AIIB said in a statement.

The loan mobilises private capital from sponsors, other financiers, and LTIF’s own sources.

“Our financing will help secure the funding supply for renewable energy project development. The project supports our commitment to sustainable energy for Asia to reduce the carbon intensity of energy supply,” AIIB vice-president and chief investment officer DJ Pandian said.

LTIF’s collaboration with AIIB will also help the company develop its environmental and social capabilities which will in the future enable it to tap the international market for green finance, the bank said.

The country is committed to reducing its carbon intensity by 30-35 percent of the 2005 levels by 2030 under the Paris agreement.

In April, we reported that construction arm of Larsen & Toubro, L&T Construction, had secured a number of Engineering, Procurement and Construction (EPC) orders worth Rs 2,500 crore to Rs 5,000 crore for its power transmission & distribution (PT&D) business in India and abroad. The company has bagged orders for laying underground cabling in certain industrial areas and towns in order to improve the reliability of power supply. Moreover, some other orders have also been won by the company for solar powered irrigation systems.

Additionally, the company has also received some orders for substations and transmission lines from certain countries of the Middle East and the ASEAN region.