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Dailymirror.news,Mumbai, October 8th, 2024: The International Finance Corporation (IFC), a member of the World Bank Group and the largest global development institution, has partnered with Axis Bank, one of India’s largest private-sector banks, to provide a $500 million loan aimed at developing the blue finance market and scaling up the financing of green projects in India.
This marks 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 funds for investments in areas such as water and wastewater management, reduction of marine plastic pollution, restoration of marine ecosystems, sustainable shipping, eco-friendly tourism, and offshore renewable energy.
In addition, this is the largest green financing transaction by IFC in India, helping Axis Bank expand its climate finance portfolio.
India’s rapid urbanization and economic growth provide significant opportunities to enhance water and energy efficiency. The water and wastewater treatment market was valued at $1.6 billion in 2022 and is projected to reach $3 billion by 2029. Similarly, the green buildings sector presents a potential investment opportunity of $1.4 trillion by 2030, driven by the demand for sustainable infrastructure. With limited public funding available, the private sector will need to step in to drive these investments.
Amitabh Chaudhry, Managing Director and CEO of Axis Bank, commented, “Given the increasing effects of climate change and the growing awareness of environmental sustainability, it is essential for banks to adopt sustainable lending practices. We are excited to partner with IFC, as we share a common vision of strengthening standards and boosting sustainable finance in India. With our focus on expanding climate and sustainable finance, we hope to be a strong and stable partner for IFC in advancing climate finance in the country.”
Makhtar Diop, Managing Director of IFC, said, “We are thrilled to announce our first blue loan in India and our largest climate finance initiative in the country. India presents a unique opportunity for innovative climate adaptation approaches. This loan will catalyze private-sector investment in the emerging blue economy while enhancing financing for green projects across the nation. It will focus particularly on green buildings that mitigate climate change impacts and generate jobs. Our partnership with Axis Bank is a key step in advancing India’s sustainable and inclusive growth.”
Axis Bank is among the first in India to have a board-approved Environmental, Social, and Governance (ESG) policy for lending that adheres to IFC Performance Standards. The Bank is committed to supporting India’s climate agenda with a public commitment to financing Rs 60,000 crore (approximately $7.2 billion) in ESG-aligned sectors by 2030. As of March 2024, the Bank has already achieved Rs 30,000 crore (approximately $3.1 billion) of this financing.
As a pioneer in sustainable finance, Axis Bank issued India’s first Green USD Bond in 2016 and the first sustainable USD AT1 bond in 2021. With IFC’s financing, Axis Bank will further promote resource-efficient growth, protect critical clean water resources, and support India’s climate goals, while creating new jobs.
Through its advisory services, IFC will help Axis Bank grow its green buildings portfolio, including affordable housing projects, and build capacity for impact reporting. IFC’s assistance will help catalyze the green buildings market in India. Additionally, IFC will provide up to $2.9 million in performance-based incentives through the UK-IFC Market Accelerator for Green Construction (MAGC) program to support the design and construction of IFC-certified EDGE (Excellence in Design for Greater Efficiencies) green buildings.
Since 2020, IFC has provided over $1.9 billion in blue loans and bonds globally, and it is working to launch and scale blue finance across the world.
