The Japan Bank for International Cooperation (JBIC) and the Government of India (GoI) have signed an agreement to establish a $600 million India-Japan Fund (IJF) to address climate and environmental challenges.

The fund will focus on environmental preservation in India, encompassing sectors such as renewable energy, electric vehicles, waste management, and water management projects.

The government of India will contribute 49% of the target corpus and JBIC the remaining 51%.

The India-Japan Fund is a product of collaboration between the National Investment and Infrastructure Fund Limited (NIIFL), India’s collaborative investment platform for both domestic and international investors, and JBIC, Japan’s policy-based financial institution.

India’s Ministry of Finance said the fund will focus on investing in environmental sustainability and low carbon emission strategies and aims to be a ‘partner of choice’ to enhance Japanese investments into India further.

JBIC said Japanese companies have faced supply chain disruptions due to the volatile global economic landscape. In this context, India has emerged as an attractive destination for the relocation of production bases and new investments, given its robust economic growth and vast market potential.

The fund aims to support Indian companies and projects collaborating with Japanese counterparts to foster a deeper and more productive relationship between them across various industries.

JBIC said India has reaffirmed its goal of achieving carbon neutrality by 2070 during the COP26 conference in November 2021. The government has taken active steps towards achieving this vision by promoting sustainable practices such as the widespread adoption of renewable energy sources and facilitating the growth of electric vehicles.

Programs like the Swachh Bharat Mission, the Smart City Mission, and subsidies for Waste-to-Energy are pivotal components of India’s strategy to attain carbon neutrality. JBIC’s investment in the India-Japan Fund is expected to bolster these environmental preservation efforts in India.

In November 2022, JBIC and NIIFL signed a memorandum of understanding aimed at promoting environmental preservation, low carbon emissions strategies, and the growth of the Indian economy.

In March, government-owned SJVN secured a green financing loan of ₹9.15 billion (~$111.2 million) from the JBIC to construct two solar power projects in India.

In the same month, PFC inked a project loan agreement with the JBIC for a ¥2.6 billion (~$20.2 million) facility.