The Asian Infrastructure Investment Bank (AIIB), a multilateral development bank headquartered in Beijing, has provided a $100-million loan to L&T Infrastructure Finance Company Limited (LTIF), a subsidiary of L&T Finance Holdings Ltd and and a leading non-bank financier of renewable energy in India.

The overseas bank with a mission to improve social and economic outcomes in Asia, said on Friday that this deal with L&T Finance Holdings embarks as AIIB's first loan first loan to a non-banking finance company (NBFC).

AIIB in its official statement added that the bank's financing by mobilising private capital will further help in increasing the supply of renewable energy in India. The loan proceeds worth $100 million will be used to on-lend to wind and solar power infrastructure projects throughout India.

The project named, 'L&T Green Infrastructure On-Lending Facility' specifies that the proposed facility will be used by L&T Infrastructure Finance Company Limited (LTIF) to finance mid and large scale solar and wind power projects in India.

LTIF, a non-bank financial company is the leading arranger and financier of renewable energy in India. By combining the strengths of Larsen & Toubro's engineering experience and LTIF's underwriting and origination skills with AIIB's guidance on environment and social standards, the facility promotes environmentally and socially and financially responsible project development.

Under the Paris Agreement, India is committed to reducing its carbon intensity by 30 to 35% of 2005 levels by 2030. "By investing in sustainable infrastructure and other productive sectors in Asia and beyond, we will better connect people, services and markets that over time will impact the lives of billions and build a better future," the bank said in the official press release.

"AIIB's financing will help secure the funding supply for renewable energy project development in India," said AIIB Vice President and Chief Investment Officer D.J. Pandian. "The project supports AIIB's commitment to sustainable energy for Asia to reduce the carbon intensity of energy supply."

LTIF's collaboration with AIIB will also help the company develop its environmental and social capabilities which will in the future enable it to tap the international market for green finance, the bank said. The loan mobilizes private capital from sponsors, other financiers and LTIF's own sources.

In a separate development earlier this week, construction arm Larsen & Toubro (L&T) received 'significant' orders across various business segments in the domestic and international market. As per its classification of contracts, these varied orders fall under "Significant" valuation category that ranges between Rs 1,000 crore and Rs 2,500 crore.

" L&T has secured orders from prestigious clients across various Indian states for its varied businesses,"the Infrastructure company said in a regulatory filing on Thursday.

The Defence business unit under the Heavy Civil Infrastructure arm of L&T has secured order from one of the major Defence PSUs for the construction of a strategic project for the Indian Air Force, that is estimated to be completed within a timeline of 33 months. L&T's water and effluent treatment business has secured orders from the Gujarat Water Infrastructure for MS pipeline from Brahmani Dam-2 to Chakampar village (Package II) and from Chakampar village to Nava Sadulka (Package III) including its operation and maintenance for five years in Morbi district, Gujarat.

Power Transmission and Distribution business has secured two different domestic orders for urban power distribution and transmission utility network. In international market, an order has been secured orders from United Arab Emirates (UAE) for the supply, installation and commissioning of 132kV underground cables,  for the supply and construction of Battery Energy Storage Systemsin Chaiyaphum and Lopburi provinces of Thailand and for establishing distribution networks in Ethiopia and Uganda.

Edited by Rupa Burman Roy