The International Finance Corporation (IFC) has partnered with Bajaj Finance to provide a $400 million loan to the company in order to support women-owned microenterprises and women micro-borrowers, as well as to increase access to climate finance for electric vehicles (EVs) and energy-efficient consumer goods. This is a component of the $1 billion debt-raising plan for the Pune-based business.
According to a statement released by Bajaj Finance on Wednesday, the investment intends to help the nation’s climate goals, foster financial inclusion, and boost competition in the climate finance industry.
In addition to enhancing the company’s position in the energy-efficient consumer goods market, IFC’s $400 million loan will allow it to increase financing availability for consumers who choose to purchase EVs, including two-, three-, and four-wheelers. Additionally, this relationship will increase the company’s capacity to finance and assist additional female microborrowers and women-owned microenterprises. Bajaj Finance’s chief financial officer, Sandeep Jain, stated.
“The IFC funding serves as a catalyst for diversifying our financing sources. With this, our volume of outstanding climate loans stands to increase four times to $600 million in 2027 from over $150 million in 2024,” he said.
Accelerated climate funding is essential for India to achieve its net-zero targets, according to IFC regional head Imad N. Fakhoury. By increasing market competition, IFC’s investment in Bajaj Finance will encourage other NBFCs and investors to increase their funding for microfinance, e-mobility, and energy-efficient solutions.
India is the third-largest energy-consuming country in the world. Millions of homes are anticipated to purchase new appliances, air conditioners, and automobiles as the nation’s energy sector expands quickly. The demand for air conditioners is predicted to increase ninefold by 2050, leading to a large increase in greenhouse gas emissions. The market for home appliances is expected to reach $59.2 billion in 2024 and expand at a rate of 7.35% per year.
Given that families consume 25% of the nation’s power and 26% of total energy, EECG is essential to the nation’s low-carbon growth trajectory. Just 26% of consumer items that need a mandated star rating are assessed as 5- or 4-star efficient, which limits the adoption of EECG and funding.
As part of the World Bank Group, IFC is the biggest private sector development organisation in emerging markets, operating in more than 100 nations. IFC allocated a record $56 billion to private businesses and financial institutions in developing nations in fiscal 2024.
