Japan International Cooperation Agency (JICA) has signed a loan agreement for a maximum amount of JPY 10 billion (₹6.65 billion) with Tata Cleantech Capital (TCCL), an Indian non-banking financial company.
Based on Green Loan Principles, the loan agreement will help TCCL offer loans to businesses across India that focus on renewable energy generation, electric vehicles, and energy efficiency.
Green Loans are loans that are limited for use in environmentally conscious projects. The loan will be provided through the private sector investment finance scheme of JICA, co-financed with the Sumitomo Mitsui Banking Corporation (SMBC).
TCCL, a joint venture between Tata Capital Limited (Tata Group) and IFC (World Bank Group), is a first-of-its-kind private sector green investment bank focusing on climate finance and advisory services. TCCL, which has been inducted into the Green Bank Network, is the premier Indian entity and the first private sector climate finance institution to be part of this network.
TCCL has contributed to the development of about 9.8 GW of renewable energy, which has averted annual carbon emissions of 15.1 MT.
JICA’s loan will support TCCL to mitigate climate change by offering green finance, which will decrease GHG emissions in India. It will also contribute to SDGs (Sustainable Development Goals), Goals 7 and 13. JICA will continue to support climate change initiatives globally and mobilize private finance for this sector.
India is the world’s third-largest emitter of greenhouse gas (GHG) at present and is projected to emit more GHG as the economy grows rapidly. India ratified the Paris Agreement in 2016, promising to decrease the emission of GHG per GDP by up to35% before 2030.
This year, in January, U.K.’s development finance institution and impact investor, CDC Group, announced a $30 million facility to TCCL through CDC’s directed green lending facility. The loan aims to address the financing barrier by directing lending to specific sub-sectors, incentivizing the rapid deployment of capital at scale.
Mercom had earlier reported that TCCL raised 25.62 million through green bonds from FMO, the Netherlands Development Finance Company.
Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.