IFC has invested Rs 667 crore ($103 million) in L&T Infrastructure Finance Company Ltd by subscribing to India's first issue of green bonds.

According to IFC, this is in line with IFC's strategy to support renewable energy infrastructure in the country and also develop the capital markets.

L&T Infrastructure, a wholly owned unit of L&T Finance Holdings Ltd, would utilize this money to lend to solar power projects. The company has been increasing its focus on renewable energy, which comprises one-third of its total portfolio of Rs 22,774 crore.

Proceeds from the Green Bonds are used for projects or assets of renewable energy, clean transport, sustainable water or land management, climate change adaptation and energy efficiency.

India's renewable energy sector has been buzzing with activity over the past few years after the government unveiled ambitious capacity addition targets. The government aims to achieve 175 GW of renewable power generation capacity by 2022. This includes 100 GW of solar and 60 GW of wind power capacity. India's renewable energy capacity is currently around 44 GW.

IFC had launched a green bond programme in 2010 to help push investments in private sector projects that support renewable energy and energy efficiency.

This update is authored by Clasis Law, Clyde & Co's associated firm in India

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