AIIB extends $50 mn loan to L&T Infra Finance for Renewable Energy

This is the first tranche of a $100 mn loan by the Bejing-based multilateral development bank; proceeds will be used to on-lend to large and mid-scale wind and solar power infra projects in India

Asian Infrastructure Investment Bank (AIIB) has released $50 million in the first tranche of assistance to L&T Infrastructure Finance Ltd for funding Renewable Energy projects in the country.

The Bejing-based a multilateral development bank, which invests in sustainable infrastructure, has sanctioned total $100 million loan to unit of L&T Finance Holdings. This is AIIB’s first loan to a non-banking financial company (NBFC) in India, the company said in a statement.

The loan proceeds will be used to on-lend to large and mid-scale wind and solar power infrastructure projects in India. With the closure of this financing deal with AIIB, LTIF has further diversified its long-term funding sources.

Dinanath Dubhashi, Managing Director & CEO, L&T Finance Holdings said that lending to clean energy goes beyond the actual book and the company has built an ecosystem for all stakeholders to be a part of the green energy initiative.

Meanwhile, L&T Infra Debt Fund (LTIDF), a unit of LTFH for refinancing operational infrastructure projects, plans to raise Rs 1,000 crore through Principal Protected Market-Linked Debentures. Rating agency CARE has assigned “AAA” to this instrument.

Its total asset size increased to Rs 9,868 crore as on March 31, 2020 from Rs 8,606 crore as on March 31, 2019. During FY20, LTIDF reported net profit of Rs 213 crore (FY19: Rs 132 crore) on a total income of Rs 903 crore (FY19: total income of Rs 755 crore).  

Its loan portfolio consists of operational infrastructure projects of which majority are backed by tripartite agreements, government guarantee and another significant portion have support from government.

As on March 31, 2020, the total portfolio was comprised of solar energy (53 per cent), road (29 per cent), wind energy (11 per cent) and others – transmission (7 per cent).