The International Finance Corporation (IFC) has joined forces with Axis Bank to provide a $500 million loan aimed at expanding green and blue project financing in India. This landmark partnership marks IFC’s first blue loan in India, a significant step toward supporting water conservation and marine ecosystem restoration, alongside green initiatives such as energy efficiency and sustainable infrastructure.
Amitabh Chaudhry, Managing Director and CEO of Axis Bank, highlighted the importance of sustainability in the banking sector: “With the increasing effects of climate change on the global ecosystem and growing awareness of environmental sustainability, it’s imperative for banks to adopt sustainable lending practices. We are excited to partner with IFC, with whom we share a common vision of strengthening standards and lending practices to boost sustainable finance in India.”
The $500 million loan will empower Axis Bank to scale its efforts in financing projects that enhance both water and energy efficiency, addressing the challenges posed by rapid urbanization and economic growth in India. The water and wastewater treatment market, valued at $1.6 billion in 2022, is expected to grow to $3 billion by 2029. Meanwhile, the green buildings sector presents a massive $1.4 trillion investment opportunity by 2030.
Makhtar Diop, Managing Director of IFC, emphasized the significance of this collaboration: “We are thrilled to announce our inaugural blue loan in India, marking our largest climate finance initiative in the country to date. This loan will catalyze private sector investment in this emerging asset class and direct long-term funding toward fostering a sustainable blue economy.”
In line with its climate goals, Axis Bank has committed to financing Rs 60,000 crores (around $7.2 billion) in ESG-aligned sectors by 2030, and it has already achieved half of this target by March 2024. The new partnership with IFC will help further this commitment and actively contribute to India’s climate agenda.
Along with the loan, IFC will provide advisory services to assist Axis Bank in expanding its green buildings portfolio, including affordable housing projects. Additionally, IFC will offer a performance-based incentive through its UK-IFC Market Accelerator for Green Construction (MAGC) program to support the design and construction of green buildings certified by IFC’s EDGE standards.
This partnership reflects a strong commitment to sustainable, inclusive growth in India, with a focus on critical areas such as water conservation, waste management, and the development of sustainable infrastructure. It sets a powerful precedent for future investments in green and blue finance across the region.
