India and the Asian Development Bank (ADB) have signed a USD 500 million loan agreement to support the development of green and sustainable infrastructure projects in alignment with the country’s climate commitments. The agreement, finalized on December 20, includes a sovereign guarantee and will be extended to the India Infrastructure Finance Company Limited (IIFCL). The loan is designed to provide long-term capital for projects focusing on connectivity, energy transition, and under-resourced sectors such as urban development, education, and healthcare.
The agreement was signed by Juhi Mukherjee, Joint Secretary in the Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India, and Mio Oka, Country Director for the Asian Development Bank. Speaking about the initiative, Mio Oka emphasized the critical role of ADB financing in mobilizing private capital for infrastructure projects, particularly those that address India’s sustainable growth and climate goals.
The Union Finance Ministry highlighted the need for innovative financing platforms and risk-mitigation tools to attract private capital investment. It noted that IIFCL, as a strategic development finance institution, is well-equipped to meet these needs, especially as India works toward achieving its net-zero commitments.
In addition to this loan, the central government recently signed another agreement with the Asian Development Bank under the second subprogram of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) program. This USD 350 million policy-based loan is part of a broader initiative aimed at enhancing India’s logistics infrastructure.
The SMILE program focuses on implementing comprehensive policy reforms to improve logistics efficiency and resilience. It supports the development of multimodal logistics infrastructure at the national, state, and city levels, while incentivizing private sector investment. The program also aims to standardize warehousing and logistics assets, streamline supply chains, and adopt smart systems for efficient and low-emission logistics.
The Ministry of Commerce and Industry stated that the SMILE program is essential to boosting India’s manufacturing sector and improving supply chain resilience. Through strategic reforms, infrastructure development, and digital integration, the initiative is poised to transform India’s logistics landscape, enhancing its competitiveness in global markets while contributing to the country’s sustainability goals.
These initiatives reflect India’s commitment to fostering economic growth through green and sustainable development while addressing pressing climate and infrastructure challenges.
