IFC partners with Axis Bank to provide $500 million climate loan in India
The International Finance Corporation (IFC), a member of the World Bank Group, has joined forces with Axis Bank to provide a $500 million loan aimed at developing a blue finance market and expanding green financing in the country
The International Finance Corporation (IFC), a member of the World Bank Group, has joined forces with Axis Bank to provide a $500 million loan aimed at developing a blue finance market and expanding green financing in the country. This marks the IFC's first blue investment in India and the nation's inaugural blue loan transaction by a financial institution.
Blue loans are specialized financing instruments that fund sustainable projects like water management, marine ecosystem restoration, reducing marine plastic pollution, eco-friendly tourism, offshore renewable energy, and sustainable shipping. This initiative also represents IFC’s largest green financing deal in India, enabling Axis Bank to grow its climate finance portfolio.
India's rapid urbanization presents a vast opportunity to improve water and energy efficiency. The water and wastewater treatment market, valued at $1.6 billion in 2022, is projected to reach $3 billion by 2029. Similarly, the green buildings sector holds a potential investment of $1.4 trillion by 2030, highlighting the urgent need for sustainable infrastructure investments.
Axis Bank’s managing director and CEO, Amitabh Chaudhry, emphasized the importance of sustainable lending practices in the face of climate change and expressed enthusiasm for collaboration with IFC. "We are excited to partner with IFC... we hope to be a strong and stable partner for IFC in the key focus area of climate finance in India," Chaudhry said.
Makhtar Diop, IFC’s Managing Director, highlighted the significance of this collaboration, stating, “This loan will catalyze private sector investment in the blue economy and foster sustainable growth in India. It will also enhance financing for climate projects, particularly green buildings that will help mitigate climate change and generate jobs.”
Axis Bank has been a leader in sustainable finance in India, having issued the country’s first Green USD Bond in 2016 and the first sustainable USD AT1 bond in 2021. The bank has committed to providing Rs 60,000 crores (approximately $7.2 billion) in financing for ESG-aligned sectors by 2030, with Rs 30,000 crores (about $3.1 billion) already achieved by March 2024.
As part of its advisory services, IFC will also assist Axis Bank in expanding its green buildings portfolio, focusing on affordable housing and enhancing impact reporting. Additionally, the UK-IFC Market Accelerator for Green Construction program will provide a performance-based incentive of up to $2.9 million to support the design and construction of EDGE-certified green buildings.
IFC, which has committed over $1.9 billion in blue loans and bonds globally since 2020, continues to build its green and blue finance portfolio, advancing sustainable growth worldwide.
