Japan will offer up to 10 billion yen ($90 million) in a loan to an Indian financial institution in an effort to spur lending to businesses promoting environmentally friendly projects in the fight against climate change.
Under an agreement it signed with the Japan International Cooperation Agency, Tata Cleantech Capital Ltd. will provide "green loans" to companies that focus on energy efficiency, renewable energy and electric vehicles across India, the world's third-largest carbon emitter after China and the United States.
The March 25 deal comes as India has pledged to reduce greenhouse gas emissions per gross domestic product by 33 to 35 percent by 2030 from the 2005 level under the Paris Agreement, a 2015 U.N. carbon capping accord.
U.S. President Joe Biden has invited Japanese Prime Minister Yoshihide Suga, Indian Prime Minister Narendra Modi, Chinese President Xi Jinping and other world leaders for a climate summit he will convene virtually on April 22 and 23.
Tata Cleantech Capital -- a joint venture between major Indian financial provider Tata Capital and the International Finance Corporation backed by the World Bank -- has contributed to the development of 9.8 million kilowatt renewable energy and the reduction of 15.1 million tons of carbon dioxide.
JICA said in a news release that the loan will support the Indian lender to mitigate the impact of climate change by offering green finance, leading to a decrease in carbon emissions.
The loan is co-financed with Sumitomo Mitsui Banking Corp., a major Japanese lender, according to the government-backed development agency.
"JICA will continue its support for climate change initiatives in the world and continue to mobilize finance for this sector," it said.