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L&T Finance arm gets $100m from AIIB for green energy funding

L&T-FinanceThe Beijing-headquartered multi- lateral developmental lender Asian Infrastructure Investment Bank (AIIB) Friday said it will provide USD 100 million in loans to L&T Infrastructure FinanceNSE -0.28 % Company for on-lending to wind and solar powerinfrastructure projects in the country.

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

“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.