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L&T Infrastructure Finance gets $100 mn boost for renewable energy push

The approval marked the first advance to a non-banking finance company (NBFC) for the Beijing-headquartered multi-lateral bank

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L&T Infrastructure Finance Company Ltd, a subsidiary of L&T Finance Holdings Ltd, has secured a $100 million loan from Asian Infrastructure Investment Bank (AIIB) to finance its renewable energy projects in India.

The approval marked the first advance to a non-banking finance company (NBFC) for the Beijing-headquartered multi-lateral bank.

"The loan proceeds will be used to on-lend to wind and solar power infrastructure projects throughout India. The loan mobilises private capital from sponsors, other financiers and L&T Infrastructure Finance Company's own sources," AIIB announced at Luxembourg.

"AIIB's financing will help secure the funding supply for renewable energy project development in India," said AIIB vice president and chief investment officer D J Pandian,

"The project supports AIIB's commitment to sustainable energy for Asia to reduce the carbon intensity of energy supply," said Pandian.

Under the Paris Agreement, India has committed itself to reduce carbon footprint up to 35% by 2030.

Last fiscal, a total of around 12 gw of generating capacity was added across India through various energy segments, as per Central Electricity Authority data. Of this 12 gw, renewable energy led by solar added 6.5 gw while wind contributed 1.6 gw as compared to 5.9 gw of thermal addition.

"Between 2019 to 2023, there is a possibility of up to 50 gw of solar capacity additions happening across the country," according to an industry observer.

As per the latest Economic Survey tabled earlier this month, India now stands at fourth in wind power, fifth in solar power and fifth in renewable power installed capacity globally.

"Rs 50,000 crore has been saved and 108.28 million tonne of CO2 emissions have been reduced by energy efficiency programmes in India," stated the Economic Survey 2019.

Share of renewable (excluding hydro above 25 mw) in total electricity generation increased from 6% in 2014-15 to 10% in 2018-19. However, thermal power continues to play a dominant role with 60%

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