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The International Finance Corporation’s USD 400 million investment in Bajaj Finance aims to expand climate finance for EVs and energy-efficient goods, contributing to India’s net-zero goals and promoting financial inclusion through increased access to green financing.
November 07, 2024. By EI News Network
The International Finance Corporation (IFC), part of the World Bank Group, has committed to investing USD 400 million in Bajaj Finance Ltd. (BFL), a non-banking financial company in India.
This funding is part of BFL’s USD 1 billion fundraising plan, aimed at expanding access to climate finance for electric vehicles (EVs) and energy-efficient consumer goods (EECG) in India.
This investment is expected to help boost the competitiveness of the climate finance sector and support India’s national climate goals. It will also promote financial inclusion by providing better access to financing, particularly for underserved areas and women-owned micro-businesses.
Bajaj Finance’s CFO and COO, Sandeep Jain, stated that the funding would help diversify their sources of financing, allowing them to increase their outstanding climate loans by four times, from over USD 150 million in 2024 to USD 600 million by 2027. This will help make EVs and energy-efficient products more accessible to consumers.
While, Imad N. Fakhoury, the Regional Director for South Asia at IFC, emphasised that increasing climate financing is crucial for India to achieve its net-zero goals. He believes this investment will inspire other financial companies to increase their support for energy-efficient products and electric mobility in India.
India, the third-largest energy-consuming country in the world, faces a significant challenge in reducing its carbon emissions while meeting the growing demand for energy. As more households buy energy-consuming products, the need for air conditioners is expected to rise significantly, increasing greenhouse gas emissions.
In 2024, India’s household appliances market is valued at USD 59.19 billion, with a projected annual growth rate of 7.35 percent. To address this, energy-efficient consumer goods are essential, as households account for a large portion of the country’s overall energy consumption.
However, the adoption of energy-efficient products remains low, with only 26 percent of consumer goods meeting high-efficiency standards. IFC’s investment in Bajaj Finance aims to help expand the use of these products and support India’s climate goals, which include reducing emissions by 45 percent by 2030.
The partnership will also contribute to India’s overall green growth strategy by providing more financing options for energy-efficient goods and promoting a shift toward sustainable consumer habits.