The European Investment Bank (EIB) has approved a EUR40M long-term loan to SREI Infrastructure Finance Limited (SREI), with the main purpose of financing investments that will help to mitigate climate change in India, including hydropower.

The loan will be supported by the Italian Export Credit Agency SACE SpA. This tripartite cooperation will not only help project financing in India but also support Italian industry by promoting exports. Both the EU and Indian economies will eventually benefit from this arrangement. This is the first installment of a EUR80M loan.

The loan is for projects in the renewable energy and energy efficiency sectors carried out mostly by private sector companies. It will target electricity and heat generation schemes, notably wind power, photovoltaic energy, hydropower and high-efficiency cogeneration. The investments will help to meet India’s rapidly growing demand for electricity by using environmentally sustainable resources.

SREI will on-lend the funds to final beneficiaries and identify and pre-select the projects. The EIB will then perform due diligence to ensure that all projects are economically and financially viable, technically appropriate and in compliance with the Bank’s environmental and social requirements and its Guide to Procurement.

This loan is being provided under the EUR4.5B Energy Sustainability and Security of Supply Facility (ESF).

Since the start of its lending activities in Asia the European Investment Bank has provided more than EUR4.9B for long-term investment projects, including EUR2.2B in the energy sector.