AIIB’s loan to L&T Infrastructure Finance will support its efforts of mobilising private investment in renewable energy sector in the country

AIIB

Image: AIIB’s loan to L&T will enhance renewable energy mobilisation in India. Photo: Courtesy of Kenueone/Pixabay.

The Asian Infrastructure Investment Bank (AIIB) has agreed to provide a $100m (£79.7m) loan to Indian company L&T Infrastructure Finance, a subsidiary of L&T Finance, to support the deployment of renewable energy in the country.

The loan will be used by L&T to finance wind and solar power infrastructure projects across the country. The loan is expected to mobilise private capital from sponsors, other financiers and L&T Infrastructure Finance’s own sources.

AIIB vice president and chief investment officer D.J. Pandian said: “AIIB’s financing will help secure the funding supply for renewable energy project development in India.

“The project supports AIIB’s commitment to sustainable energy for Asia to reduce the carbon intensity of energy supply.”

AIIB noted that India has a commitment to reduce its carbon intensity by 30% to 35% of 2005 levels by 2030 under the Paris Agreement. To achieve this goal, the country needs to increase its share of non-fossil fuels in its energy mix.

By investing in renewable energy, the country can achieve this goal in an efficient way, while meeting its growing energy needs.

AIIB also offers loan to improve water supply in Bangladesh

Besides providing loan to L&T, AIIB has agreed to provide $100m £79.7m) loan to improve water supply and sanitation services to undeserved communities in Bangladesh.

The loan will support the Bangladesh Municipal Water Supply and Sanitation project, which will invest in water, sanitation and drainage infrastructure across 30 municipalities, where people mostly rely on public standpoints and shallow-tube wells.

Once completed, the project can serve about 600,000 people, by connecting them to new piped water supply systems.

AIIB Director General Supee Teravaninthorn said: “AIIB continues to ensure its projects are economically, environmentally and socially sustainable in a balanced and integrated manner. This project is expected to directly contribute to the achievement of Sustainable Development Goal (SDG) 6, which is to ensure access to water and sanitation for all.”