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<p>The Asian Infrastructure Investment Bank (<a href="https://www.aiib.org/en/index.html" target="_blank" rel="noopener noreferrer">AIIB)</a> has announced that it will provide a $100 million loan to L&amp;T Infrastructure Finance Company Limited (<a href="https://www.ltfs.com/companies/lt-infra-finance.html" target="_blank" rel="noopener noreferrer">LTIF</a>).</p>
<p>The loan proceeds will be used to finance mid and large-scale wind and solar projects throughout India. The loan mobilizes private capital from sponsors, other financiers, and LTIF’s sources.</p>
<p>LTIF, a non-banking financial company classified as an infrastructure finance company by the Reserve Bank of India, is one of the leading arrangers and financiers of renewable energy in India. LTIF is a subsidiary of L&amp;T Financial Holdings, which in turn, is majority-owned by <a href="http://www.larsentoubro.com/" target="_blank" rel="noopener noreferrer">Larsen &amp; Toubro</a>, an engineering and construction company in India.</p>
<p>The $100 million project fund is to be disbursed until September 2020, and the estimated date of financing approval has been mentioned as Q3 2019.</p>
<p>Through this project, the AIIB proposes to combine the strengths of Larsen &amp; Toubro’s engineering experience and LTIF’s underwriting skills with AIIB’s guidance on the environment and social standards. The new entity will promote environmentally, socially, and financially responsible project development.</p>
<p>The proposed financing is aligned with the government&#8217;s plan to reduce India&#8217;s carbon intensity by 30%-35% of 2005 levels under the Paris Agreement. There is a dearth of financing options for sustainable energy projects in India, and this venture would increase the supply of renewable energy in India through the mobilization of private capital.</p>
<p>AIIB’s Environmental and Social Policy will apply to this lending facility. The project has been placed in Category FI,  the financing structure involving the provision of funds through a financial intermediary, and therefore LTIF has been delegated the decision-making on the use of these funds for sub-projects that will be applied through an Environmental and Management System (ESMS).</p>
<p>LTIF has initiated the establishment of an ESMS system that will be expanded to include screening, categorizing, appraisal, contracting, and monitoring of subprojects supported by the AIIB.</p>
<p><a href="https://mercomindia.com/adb-finance-transmission-network-components-co-financing-aiib/" target="_blank" rel="noopener noreferrer">Earlier, </a>the Asian Development Bank (ADB) announced increasing its investment in the Indian grid-infrastructure development by agreeing to fund additional power transmission network components with co-financing from the Asian Infrastructure Investment Bank (AIIB).</p>
<p>Last year, Larsen &amp; Toubro (<a href="http://www.larsentoubro.com/" target="_blank" rel="noopener noreferrer">L&amp;T</a>) Construction bagged <a href="https://mercomindia.com/lt-construction-200-mw-solar-projects/" target="_blank" rel="noopener noreferrer">two grid-connected solar photovoltaic (PV) projects</a> worth ₹5.9 billion (~$92 million) to be developed in the states of Tamil Nadu and Rajasthan, as was reported by Mercom.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/soumik/" class="vcard author" rel="author"><span class="fn">Soumik Dutta</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><p><img class="wp-image-13449 alignleft" src="https://mercomindia.com/wp-content/uploads/2019/05/Soumikimage-e1556814790294-275x300.jpg" alt="" width="93" height="102" />Soumik is a staff reporter at Mercom India. Prior to joining Mercom, Soumik was a correspondent for UNI, New Delhi covering the Northeast region for seven years. He has also worked as an Asia Correspondent for Washington DC-based Hundred Reporters. He has contributed as a freelancer to several national and international digital publications with a focus on data-based investigative stories on environmental corruption, hydro power projects, energy transition and the circular economy. Soumik is an Economics graduate from Scottish Church College, Calcutta University.</p>
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AIIB to Provide $100 Million Loan to L&T for Solar and Wind Projects Financing in India

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