L&T Infrastructure Finance Company Limited (LTIF), an Indian non-banking financial company (NBFC), announced that it had received the first $50 million (~₹3.72 billion) of a $100 million (~₹7.43 billion) external commercial borrowing (ECB) loan from the Asian Infrastructure Investment Bank (AIIB) to fund renewable lending in India.
An ECB is a loan availed by an Indian entity from a non-resident lender in a foreign currency. This loan marked AIIB’s first-ever loan to an NBFC in India, according to a press statement by LTIF, a wholly-owned subsidiary of L&T Finance Holdings Limited.
In July 2019, Mercom reported on AIIB’s announcement to provide a $100 million (~₹7.43 billion) loan to LTIF to help it finance mid and large-scale wind and solar projects throughout India. It said the loan mobilized private capital from sponsors, other financiers, and LTIF’s sources.
LTIF has been classified as an infrastructure finance company by the Reserve Bank of India. It is one of the leading arrangers and financiers of renewable energy in India.
The company said it would use the loans to lend to large and mid-scale wind and solar power infrastructure projects in the country. It added that this collaboration would help it strengthen its environmental and solar capabilities, which in turn would help it get better global visibility for green finance in the future.
“Our lending to clean energy goes beyond the actual book, and we have today built an ecosystem for all stakeholders to be a part of the green energy initiative. We firmly believe that renewable power holds great potential in fighting the dual challenge of climate change and the ever-growing demand for energy,” said Dinanath Dubhashi, Managing Director and CEO, L&T Finance Holdings.
LTIF also said it is working on setting up an environment and social monitoring system that will be expanded to include screening, categorizing, appraisal, contracting, and monitoring of subprojects supported by AIIB in tune with the AIIB’s standards.
In December 2019, AIIB announced that its board of directors approved a $65 million (~₹4.83 billion) loan for a 250 MW solar power project in Jodhpur.
Nithin is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai. More articles from Nithin.