The EIB and Italy’s SACE S.p.A have signed a 40 million long-term loan agreement with Indias SREI to help finance a series of investments intended to mitigate climate change in the country.
This tripartate cooperation is the first action of an 80 million pledge, and has been designed to promote Italian exports, assist Indias renewable energy objectives, and benefit economies in the EU.
Funds from the loan will be plowed into renewable energy projects in India being mostly undertaken by private sector companies. Specifically, the financing will target electricity and heat generation schemes, most notably photovoltaic energy and wind power.
The deal is an attempt by all parties to meet Indias surging demand for environmentally sustainable electricity, and will also help to stimulate portions of the Indian economy through the development of domestic energy resources, improved energy efficiency and a reduction in airborne pollutants and carbon emissions.
SREI will manage the funding, identifying projects it believes are worthy of further financing. The EIB will carry out due diligence to ensure the money is being used wisely, efficiently, and effectively, and that the initiatives also comply with the Bank’s environmental and social requirements.
The loan is part of the EIB’s wider Energy Sustainability and Security of Supply Facility (ESF) fund, which so far has provided more than 4.9 billion for long-term investment projects in Asia, 2.2 billion of which has been ploughed into the energy sector.