This summary describes a proposed investment by international commercial lenders yet to be identified, to provide up to $1,000 million of non-shareholder loans to the India Infrastructure Finance Company Limited (IIFCL), a 100 percent sovereign owned non-banking financial company, non-deposit taking, infrastructure finance company (NBFC-ND-IFC). The proceeds of the loans are expected to be implemented in phases and directed by IIFCL for take-out and direct financing of renewable energy projects, specifically solar, wind, and hybrid solar-wind projects. 

These commercial loans will be supported by up to $1,520 million in MIGA guarantees, comprising 95 percent cover for the loan principal and interest payments including MIGA premia, for a tenor of up to 15 years, against the risk of the Non-Honoring of Financial Obligations by a State-Owned Enterprise (NHFO-SOE). 

IIFCL was set up in 2006 to provide long-term financing to viable infrastructure projects across all infrastructure sub-sectors as notified by the Government in the Harmonized Master List of Infrastructure Subsectors, such as energy, transportation, water, sanitation, communication, social and commercial infrastructure. IIFCL finances greenfield and brownfield projects through its direct lending, take-out finance, refinance and credit enhancement product offerings.   

Environmental Categorization 

The MIGA guarantee will support a specific pool of solar, wind and hybrid solar-wind energy projects in India. The pool will include both refinancing and new financing.  Renewable energy projects typically have the potential for significant adverse environmental or social risks and/or impacts that are diverse, irreversible, or unprecedented. As such, the MIGA Project has been categorized as FI-1 in accordance with MIGA’s Policy on Environmental and Social Sustainability (2013).  

The applicable E&S requirements for the Project are: (i) the MIGA Exclusion List; (ii) applicable E&S laws and regulations in India and (iii) the MIGA Performance Standards (PSs). 

As a financial intermediary, IIFCL is required to implement an E&S risk management process consistent with Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts (PS1), to manage the E&S risks and impacts associated with its lending activities supported by MIGA.  IIFCL is also required to implement labor policies that are consistent with Performance Standard 2: Labor and Working Conditions (PS2).  

In relation to PS1, IIFCL’s E&S risk management process is documented in the Environmental and Social Safeguards Framework (ESSF). The ESSF is integrated into IIFCL’s credit cycle and includes a procedure for identifying, assessing and managing E&S risks and impacts associated with the projects financed. The ESSF also includes a list of prohibited investment activities.  IIFCL applies Indian laws and regulations to all projects, and for projects financed through credit lines supported by development finance institutions, IIFCL applies the E&S standards of the respective institutions.    In relation to labor standards, IIFCL’s labor and working conditions are consistent with the objectives of PS2. Amongst other aspects, IIFCL has labor policies and procedures that address terms of employment, recruitment, renumeration, benefits, grievance management and non-discrimination. 

For new financing under the MIGA guarantees, IIFCL will screen the projects against MIGA’s requirements:  the MIGA Exclusion List; applicable E&S laws and regulations in India and the MIGA PSs. Gaps identified in the E&S assessment of projects will be documented in timebound E&S action plans and all projects will be monitored regularly for compliance with MIGA requirements. IIFCL will implement an E&S complaints mechanism and the project financed will also implement grievance mechanisms for affected communities. 

For the proposed guarantee, IIFCL will be required to report annually to MIGA on the E&S performance of the projects covered by the guarantee. 

Development Impact 

The proposed MIGA guarantees are expected to mobilize private capital from international commercial sources and facilitate longer-tenor financing to address the constraints of the availability of cost competitive long-term capital for infrastructure financing in India. The Project is expected to contribute to India’s sustainable development objectives by supporting the Government of India’s renewable energy program to achieve 500GW of non-fossil fuel capacity by 2030 as part of its commitment to reach net-zero emissions by 2070. The Project is aligned with the WBG’s Country Partnership Framework (CPF) FY26-31. The CPF focuses on accelerating job-rich, private sector-led growth while ensuring inclusivity and sustainability. Consistent with the proposed guarantee, the CPF emphasizes investments in infrastructure, including renewable energy, that crowd in private capital and leverage innovative financing models. By attracting international commercial capital, the guarantee is expected to have positive demonstration effects for the financing of future infrastructure transactions in India.