The Asian Development Bank (ADB) will invest $25 million in a certified climate bond issue by Vivriti Capital (VCL). The proceeds will be used to finance companies engaged in sectors including electric vehicles, solar and wind energy, and waste management.

At least 30% of the funds will be specifically allocated to electric vehicle financing, including charging stations and battery swapping stations.

The initiative aims to enhance access to climate finance for underserved enterprises, including micro, small, and medium-sized enterprises (MSMEs), mid-market corporates, and retail clients across the country.

The investment is expected to have a significant impact on India’s nascent green bond market. Currently, only 3.8% of domestic corporate bonds in India are classified as green bonds. This initiative aims to stimulate growth in the country’s debt capital market for sustainable finance.

ADB Director General for Private Sector Operations Suzanne Gaboury said the partnership with Vivriti Capital will allow ADB to support scalable and commercially viable renewable energy projects and promote decarbonization of road transport, which accounts for up to 30% of urban air pollution in India.

India has set ambitious targets in its updated nationally determined contributions, including reducing carbon emissions by one billion tons by 2030 and achieving net-zero emissions by 2070.

VCL Founder and Managing Director Vineet Sukumar said the company is well-positioned to channel the funds into critical areas such as electric vehicles and renewable energy projects.

VCL  specializes in financing various sectors including mid-market corporates, non-banking financial companies, MSMEs, and retail clients.

ADB has financed several of India’s clean energy projects in the past. In May this year, ADB approved a $148.5 million loan to enhance, upgrade, and climate-proof Sikkim’s electricity distribution system.

In December last year, it loaned $200 million to enhance Uttarakhand’s electricity supply and enable the state’s transition to clean energy sources.