In December 2024, the Asian Development Bank (ADB) and India’s National Bank for Financing Infrastructure Development (NaBFID) signed a Letter of Intent (LOI) , to boost financing for the country’s infrastructure sector for sustainable development.
- The LoI was signed by Ramesh Subramaniam, Group Director General (GDG) of the ADB sector, and Rajkiran Rai G, Managing Director (MD) of NaBFID in Manila, Philippines.
Key Points:
- Under the agreement, ADB will give NaBFID a technical grant to improve its capacity and climate finance to address the funding gap in India’s infrastructure sector.
- The collaboration also includes offering credit lines through ADB-backed private-sector investments to help finance and transform urban infrastructure and innovative projects that promote sustainable and inclusive growth in India.
- ADB and NaBFID also co-hosted a seminar highlighting the importance of infrastructure financing for resilient and sustainable growth.
ADB approved a USD 500 million loan for India’s Green Infrastructure:
The ADB has approved a USD 500 million loan, backed by a sovereign guarantee, to India Infrastructure Finance Company Limited (IIFCL) to support India’s infrastructure projects in areas such as connectivity, energy transition, urban development, education, and healthcare.
- IIFCL can serve as an anchor government investor to draw private sector entities into a consortium of lenders financing these initiatives.
i.This significant step helps to bridge the climate financing gap of USD 1 trillion.
ii.To ensure the effectiveness of these initiatives, a sustainability unit, an environmental sustainability framework, and a project sustainability scoring system will be established .
ADB approved a USD 789 million loan to develop Amaravati as a green and smart city
The ADB has approved a USD 788.8 million loan to Andhra Pradesh(AP) for developing Amaravati as a green, smart capital city with world-class infrastructure.
- The loan will be provided in Japanese yen(JPY) with a total value of 121.97 billion.
Key Points:
i.The Amaravati Inclusive and Sustainable Capital City Development Program aims to transform Amaravati into a growth hub, boosting the region’s economic prospects and creating job opportunities.
ii.The project will receive support from other Multilateral Development Banks (MDBs) to provide global expertise and technical assistance to the AP Government, helping to build a strong foundation for a dynamic, sustainable, and vibrant capital.
Note: The World Bank(WB) and ADB together have in principle committed to fund USD 1600 million for the development of Amaravati.
About National Bank for Financing Infrastructure Development (NaBFID):
The Government of India(GoI) has notified the NaBFID as a public financial institution under the Companies Act, 2013 in September 2024.
Chairman – KV Kamath
Headquarters – Mumbai, Maharashtra
Established – 2021
