Tata Cleantech Capital, a joint venture between Tata Capital and IFC, on Thursday signed an agreement with the Japan International Cooperation Agency (JICA) for up to 10 billion yen (one yen is 67 paise) loan for on-lending to renewable energy players.
This loan will be provided through private sector investment finance scheme of the JICA and will be co-financed with the Sumitomo Mitsui Banking Corporation, Tata Cleantech said.
Under the Paris Agreement on climate change signed in 2016, the government committed to cut greenhouse gas emissions intensity of its GDP by 33-35 per cent by 2030. To achieve the target, the government is promoting mitigation measures like installation of renewable energy (solar and wind power), energy efficient equipment, and electric vehicles.
The JICA loan will support the Tata group company to mitigate the impact of climate change by offering green finance, which will contribute to lower the GHG (greenhouse gas) emissions. It will also contribute to the Sustainable Development Goal 7 (affordable and clean energy) and 13 (climate change).
“This loan from JICA will enable us to accelerate the pace of transition to clean energy. Our focus will continue to be to fund and support projects across renewable energy, e-mobility and energy efficiency sectors by channelising and mainstreaming climate finance in the country,” said Tata Cleantech Managing Director Manish Chourasia.
Tata Cleantech Capital is a joint venture between Tata Capital and the International Finance Corporation, and is a first-of-its-kind private sector green investment bank with focus on climate finance and advisory services. Since its inception in November 2011, it has played an instrumental role in mainstreaming finance for new and nascent sectors.
In 2019, it had secured $100-million credit line from the Green Climate Fund to develop a roof-top solar market. Internationally recognised by its induction into the Green Bank Network, TCCL is the premier domestic entity and the first private sector climate finance institution to be part of this network.
TCCL has contributed to the development of 9.8 gigawatts (GW) renewable energy, which has averted annual carbon emissions of 15.1 tonnes. TCCL has built a loan of $850 million.