The International Finance Corporation (IFC), a key member of the World Bank Group and the world’s largest development institution focused on the private sector, has partnered with Axis Bank, one of India’s largest private-sector banks, to provide a $500 million loan aimed at developing the country’s blue finance market and scaling up investment in green projects. This is IFC’s inaugural blue investment in India and marks the first-ever blue financing transaction by a financial institution in the country.
Blue loans are designed to support projects that protect and restore oceanic and freshwater resources. These loans focus on areas such as water and wastewater management, reducing marine plastic pollution, restoring marine ecosystems, sustainable shipping, eco-friendly tourism, and offshore renewable energy. With India’s increasing need for sustainable water and energy solutions, this partnership is expected to play a pivotal role in fostering a more sustainable and resilient economy.
Unlocking Potential in India’s Climate Finance Market
This $500 million deal also represents IFC’s largest green financing initiative in India to date. The loan will enable Axis Bank to enhance its climate finance portfolio, directing funding toward projects that will have a measurable impact on environmental sustainability. As India grapples with rapid urbanisation and economic growth, the opportunity to improve water and energy efficiency is immense. According to industry estimates, the water and wastewater treatment market in India, valued at $1.6 billion in 2022, is set to expand to $3 billion by 2029. The green buildings sector presents another investment opportunity, with an estimated $1.4 trillion in market potential by 2030.
However, much of this investment will need to come from the private sector due to limited public funding. The collaboration between IFC and Axis Bank is designed to address this gap and drive private investment into sustainable projects.
Promoting a Sustainable Blue Economy and Green Buildings
Makhtar Diop, IFC’s Managing Director, emphasised the significance of the partnership in advancing a sustainable blue economy. "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 not only stimulate private sector investment in this emerging asset class, but also channel long-term funding toward fostering a sustainable blue economy. It will also enhance financing for climate projects across India, with a strong focus on green buildings that will mitigate the impacts of climate change and create jobs," Diop said.
The collaboration with Axis Bank will not only support India’s climate and sustainability goals but also help to catalyse private sector investments that are crucial for meeting the country’s evolving environmental challenges. With both institutions committed to sustainable finance, the partnership is poised to make a significant impact on India's green and blue economy, creating jobs and advancing the nation's climate agenda.
As the need for innovative financing solutions grows globally, this partnership between IFC and Axis Bank sets a powerful precedent for combining private sector financing with long-term sustainability goals.
