The Japan Bank for International Cooperation (JBIC) and the National Investment and Infrastructure Fund Limited (NIIFL) have on Wednesday launched a $588 million fund to to invest in sustainability projects.

JBIC said in a statement that it signed an agreement for equity participation in the India-Japan Fund.

The target size of the fund is INR 49 billion ($588 million), with the government of India and JBIC committed to investing INR 24 billion ($288.36 billion) and INR 25 billion ($300.37 billion), respectively.

The fund was established by the NIIFL, India’s collaborative investment platform for both Indian and international investors, and it is anchored by the government of India.

The fund will invest in India’s environmental preservation sector, including in renewable energy, electric vehicles, waste management, and water management projects.

Additionally, the Fund, through collaboration between NIIFL and JBIC IG, a joint venture between JBIC and Industrial Growth Platform, Inc., will support Indian companies and projects that collaborate with Japanese companies with the aim of enhancing the cooperative relationship between Indian and Japanese companies across all sectors.

As part of its commitment to global climate action, India made a significant announcement in November 2021 during COP26 by reaffirming its goal of achieving carbon neutrality by 2070.

To realize this vision, the government has actively promoted sustainable practices, including the widespread adoption of renewable energy sources and the facilitation of electric vehicles.

Additionally, the government has been actively initiating numerous schemes that are key driving factors to assist the waste and water management sector to achieve carbon neutrality, such as the Swachh Bharat Mission, the Smart City Mission, and subsidies for Waste-to-Energy.

JBIC’s commitment is expected to contribute toward these environmental preservation efforts by India through the fund.

On another front, Japanese companies are facing the disruption of supply chains attributable, in part, to the precarious global situation, and India, whose economic growth has been tremendous with its vast market in recent years, is drawing attention as a destination for the relocation of production bases and new investments.

JBIC’s commitment is also expected to contribute toward the maintenance and improvement of the international competitiveness of Japanese companies through the fund’s support for Japanese companies expanding their businesses in India.

In November 2022, JBIC and NIIFL signed a memorandum of understanding (MoU) that aimed to promote environmental preservation, low carbon emission strategies, and growth of the Indian economy, as well as enhance the cooperative relationship between Indian and Japanese companies.

JBIC’s equity participation in the fund is based on this MoU.

As Japan’s policy-based financial institution, JBIC will continue to support global environmental preservation efforts and the maintenance and improvement of the international competitiveness of Japanese industry by drawing on its various financial facilities and programs for structuring projects and by performing its risk-assuming function.

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