India: EUR 150 million loan to mitigate climate change

The European Investment Bank (EIB) and Exim Bank signed a EUR 150 million loan for financing investments that will contribute to the mitigation of climate change.

The EIB loan will make long term financing available for investments that contribute to climate change mitigation through projects in renewable energy and energy efficiency in India implemented by public and private sector companies. The operation will contribute to the EU-India Strategic Partnership and cooperation with India which foresees, inter alia, energy sustainability, and combating climate change.

The framework loan comprises a series of investments dedicated to renewable energy projects for the production of electricity and heat (small hydro, wind, solar, geothermal, sustainable biomass), energy efficiency projects (cogeneration, district heating, industrial modernisation), and other climate change mitigation projects. EXIM will on-lend the loan to small, medium-scale and some large projects to private and public companies.

This loan would contribute to environmental sustainability, a key priority for the EU and the EIB. It is the EIB’s second operation of its kind with EXIM Bank of India. The first loan, a framework loan, signed in December 2008 for financing investment that contribute to the mitigation of climate change and support of EU presence has been implemented successfully and to the satisfaction of the EIB.

Lending operations outside the EU are part of the EU’s cooperation policy with third countries. The EIB has been providing loans in Asia and Latin America since 1993 under three successive mandates. Under the current mandate 2007-2013, it can lend up to EUR 3.8 billion.

In 2011, the EU established a dedicated EUR 2 billion Climate Change Mandate, for the period 2011-2013, for the Bank to support climate change mitigation and adaptation projects across the regions. Furthermore, in order to supplement its traditional external lending mandates, the EIB established in 2007 a EUR 4.5 billion financing facility to support investments in renewable energy, energy efficiency, as well as climate change mitigation and adaptation projects in other sectors in emerging countries. There are no amounts allocated per country in any of the above mandates and facilities.