Japan International Cooperation Agency (JICA) signed a loan agreement for up to JPY 10 billion (€ 6.65 billion) with Tata Cleantech Capital (TCCL), an Indian non-bank finance company.
Based on the principles of green lending, the loan agreement will help MTBI offer loans to Indian companies that focus on renewable energy production, electric vehicles and energy efficiency.
Green loans are loans with limited use for environmentally friendly projects. The loan will be provided through JICA’s Private Sector Investment Finance Program, co-financed with Sumitomo Mitsui Banking Corporation (SMBC).
TCCL, a joint venture between Tata Capital Limited (Tata Group) and IFC (World Bank Group), is the leading private sector green investment bank focused on climate finance and advisory services. TCCL, which was inducted into the Green Bank Network, is the first Indian entity and the first private sector climate finance institution to be part of this network.
TCCL has contributed to the development of approximately 9.8 GW of renewable energy, which has avoided annual carbon emissions of 15.1 MT.
JICA’s loan will help TCCL mitigate climate change by providing green finance, which will reduce GHG emissions in India. It will also contribute to the SDGs (Sustainable Development Goals), Goals 7 and 13. JICA will continue to support global climate change initiatives and mobilize private finance for this sector.
India is currently the world’s third largest emitter of greenhouse gases (GHGs) and is expected to emit more GHGs as the economy grows rapidly. India ratified the Paris Agreement in 2016, promising to reduce GHG emissions per GDP by up to 35% by 2030.
This year in January, the UK’s development finance institution and impact investor, CDC Group, announcement a $ 30 million facility for MTBI through CDC’s Green Led Lending Facility. The loan aims to overcome the financing barrier by directing loans to specific sub-sectors, encouraging the rapid deployment of large-scale capital.
Mercom previously reported that TCCL raised 25.62 million via green bonds from FMO, the Dutch development finance company.
Rahul is a journalist at Mercom India. Prior to entering the world of renewable energy, Rahul was the head of the Gujarat office for The Quint. He also worked for DNA Ahmedabad and Ahmedabad Mirror. Coming from a banking and financial background, Rahul also worked for JP Morgan Chase and State Bank of India. More articles by Rahul Nair.