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AIIB Releases USD 50 mn as 1st Tranche to L&T Infrastructure Finance for Renewable Energy

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AIIB releases $50 mn to L&T infra financeOn 7, 2020 Asian Infrastructure Investment Bank(AIIB) has released USD 50 million in the first tranche of assistance to L&T Infrastructure Finance Ltd(LTIF), to fund renewable Energy Projects in the country. The released amount is part of a sanctioned USD 100 million External Commercial Borrowing(ECB) loan. 

  • This is the 1st loan of AIIB to a non-banking financial company (NBFC) in India.

Gist about the project

i.The objective of the project is to enhance the supply of renewable energy in India by mobilizing private capital. 

ii.On completion, the project will increase private capital investment in renewable energy projects in India, which will increase the provision of affordable, clean energy and reduce the level of greenhouse gas emissions.

Major Highlights

i.The loan proceeds will be used to finance large and mid-scale wind and solar power infrastructure projects in India. 

ii.LTIF will establish an Environment & Social Monitoring System that will screen, categorise, appraise, contract and monitor sub-projects supported by AIIB in accordance with the AIIB Environmental and Social Standards(ESS).

iii.With closure of this financing deal with AIIB, LTIF has further diversified its long term funding sources.

Benefits of the partnership

  • This collaboration will enable the company to enhance its environmental and social capability, which help it to tap the international market for green finance, in the future.
  • The partnership will also aid LTIF to tap into the international market of green finance.

Note

i.L&T Infra Debt Fund (LTIDF), a unit of LTFH for refinancing operational infrastructure projects, intends to raise Rs 1,000 crore by way of  Principal Protected Market-Linked Debentures. The Credit Analysis & Research Limited(CARE), a rating agency has assigned “AAA” to this instrument.

ii.L&T Finance had previously mentioned  that it had plans to raise up to Rs 2,000 crore by issuing preference shares through public offer or private placement.

About L&T Finance Holdings Ltd:
LTIF is a wholly owned subsidiary of L&T Finance Holdings Ltd, a part of Larsen & Toubro Limited
Headquarters– Mumbai , Maharashtra
MD & CEO and Director on the Board of LTIF–  Dinanath Dubhashi

About AIIB:
Headquarters– Beijing, China
President and Chairman of Board of Directors– Jin Liqun