International Finance Corporation (IFC), private sector lending arm of the World Bank Group, on Monday tied up with Axis Bank to provide a USD 500 million (about Rs 4,200 crore) loan to help develop a blue finance market and scale up financing of green projects in India.
This is IFC’s first blue investment in India and the first blue transaction by a financial institution in the country, a statement said.
Blue loans are financing instruments that raise and earmark funds for investments such as water and wastewater management, reduction of marine plastic pollution, restoration of marine ecosystems, sustainable shipping, eco-friendly tourism, and offshore renewable energy.
This transaction is also the largest green financing by IFC in the country, it said, adding, the funding will enable Axis Bank to expand its climate finance portfolio.
With India’s rapid urbanisation and economic growth, there is a substantial opportunity to enhance water and energy efficiency. The water and wastewater treatment market size was estimated at USD 1.6 billion as of 2022 and is expected to reach USD 3 billion by 2029.
Additionally, the green building sector presents an investment opportunity of USD 1.4 trillion by 2030, driven by a need for sustainable infrastructure. Most of these investments need to come from the private sector to offset limited public funding.
“We are thrilled to announce our inaugural blue loan in India, and our largest climate finance initiative in the country to date. India serves as an exceptional testing ground for innovative approaches to climate adaptation,” said IFC Managing Director Makhtar Diop.
This loan will not only catalyse private sector investment in this emerging asset class but also direct long-term funding toward fostering a sustainable blue economy, he said.
Axis Bank Managing Director and CEO Amitabh Chaudhry said: “with the increasing effects of climate change into the