ADB to Invest $25 Million in Certified Climate Bond for Climate Financing in India

NEW DELHI, INDIA (1 October 2024) — The Asian Development Bank (ADB) will invest $25 million in a certified climate bond issue by Vivriti Capital Limited (VCL), the first such bond issued by a medium-sized nonbank financial company in India —with proceeds to provide finance for companies engaged in sectors including electric vehicles, solar and wind energy, and waste management.

The bond is being certified by the Climate Bonds Initiative and aims to enhance access to climate finance for financially underserved enterprises, including micro, small, and medium-sized enterprises (MSMEs), mid-market corporates, and retail clients in India. At least 30% of the funds will be earmarked for electric vehicle financing, including charging stations and battery swapping stations. Green loans are used to fund new or existing projects that deliver environmental or climate-related benefits.

“Climate bonds can bridge the large market gap for climate finance in India while supporting the development of the capital market,” said ADB Director General for Private Sector Operations Suzanne Gaboury. “This partnership with Vivriti Capital Limited allows ADB to support scalable and commercially viable renewable energy projects and promote decarbonization of road transport, which accounts for up to 30% of urban air pollution in India.”

India urgently needs climate finance to tackle the worsening impacts of climate change, with more than 80% of the population at risk of climate-related disasters. In its updated nationally determined contributions, India has set ambitious targets including reducing carbon emissions by one billion tons by 2030 and achieving net-zero emissions by 2070. Moreover,  India's debt capital market needs further development, with only 3.8% of domestic corporate bonds classified as green bonds.

"We are honored to receive this significant investment from the Asian Development Bank, a testament to our unwavering commitment to sustainability and India's ambitious climate goals. As the country sets out to reduce carbon emissions by one billion tons by 2030 and achieve net zero by 2070, the need for substantial financial support has never been more crucial,” said VCL Founder and Managing Director Vineet Sukumar. “With this partnership, we are well-positioned to channel these funds into critical areas such as electric vehicles and renewable energy projects. These investments will not only drive sustainable economic growth but also create a lasting multiplier effect across the broader economy."

The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in the low-carbon economy. It also administers the international Climate Bond Standards and Certification Scheme.

Incorporated in 2017, VCL specializes in providing financing to mid-market corporates, nonbank financial companies, MSMEs, and retail clients. VCL has assets under management of more than INR 78 billion and over 400 enterprise clients across more than 20 states of India. VCL has more than 1 million retail borrowers sourced through more than 35 retail partners and more than 975 MSMEs sourced through more than 45 supply chain anchors.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.