The Asian Development Bank (ADB) said it will invest $25 million in a certified climate bond issue by mid-market lender Vivriti Capital, according to a press release.
The proceeds of the bond issue will be used to provide finance for companies engaged in sectors including electric vehicles, solar and wind energy, and waste management.
The bond issue aims to enhance access to climate finance for financially underserved enterprises, including micro, small, and medium-sized enterprises (MSMEs), mid-market corporates, and retail clients in India.
At least 30% of the funds will be earmarked for electric vehicle financing, including charging and battery swapping stations.
“Climate bonds can bridge the large market gap for climate finance in India while supporting the development of the capital market,” said ADB Director General for Private Sector Operations Suzanne Gaboury.
“This partnership with Vivriti Capital Limited allows ADB to support scalable and commercially viable renewable energy projects and promote decarbonisation of road transport, which accounts for up to 30% of urban air pollution in India,” Gaboury added.
Vivriti Capital, which has assets under management of more than Rs 78 billion, provides financing to mid-market corporates, nonbank financial companies, MSMEs, and retail clients.
“With this partnership, we are well-positioned to channel these funds into critical areas such as electric vehicles and renewable energy projects,” said Vivriti’s founder and managing director Vineet Sukumar.
With India targeting net-zero emissions by 2070, investors are increasingly tapping opportunities in the climate tech sector and are preparing substantial capital pools for green energy initiatives.
Venture Intelligence data shows a significant increase in the capital committed by limited partners (LPs) to climate-focused fund managers over the past two years. Thirteen climate-focused funds raised $719 million in 2023, while another six funds raised a record $989 million in 2022. In contrast, only two climate funds garnered commitments worth $90 million in 2021, and one climate-tech fund raised a meager $31 million in 2020.
In August, World Bank Group member International Finance Corporation (IFC) disclosed plans to invest $30 million in the latest climate-focused fund of Temasek-backed LeapFrog Investments. As of July, Global Environment Fund (GEF) Capital Partners had raised $380.2 million from US investors for its latest climate-focused private equity vehicle.
Meanwhile, Indian renewable energy firm Continuum Green Energy secured a $150-million equity investment from Just Climate, a specialist investment firm established by former US Vice President Al Gore’s Generate Investment Management.