The Indian government and the Asian Development Bank (ADB) have signed a $500 million loan agreement to finance green and sustainable infrastructure projects, advancing the country’s climate action goals.

The loan, backed by a sovereign guarantee, will be channelized through the India Infrastructure Finance Company Limited (IIFCL). The funds are expected to support projects focusing on energy transition, connectivity, urban development, education, and healthcare.

“ADB financing will help IIFCL provide long-term capital for critical infrastructure projects while addressing under-resourced sectors like urban projects and health care,” said Mio Oka, ADB’s Country Director for India.

The initiative will also strengthen IIFCL’s institutional capacity by integrating green practices into infrastructure planning. The Ministry of Finance stated that a sustainability unit, an environmental framework, and a project scoring method to assess sustainability ratings will be established.

Additionally, the project aims to attract private sector investments by mitigating risks and expanding IIFCL’s financial product offerings.

This partnership underscores the importance of innovative financing platforms in meeting India's net-zero commitments.

Meanwhile, last week, India and ADB signed a $350 million policy-based loan under the SMILE programme to reform the logistics sector and strengthen domestic manufacturing resilience.