India and Japan Partner to Create a $600 Million Climate Fund

06 Oct, 2023

India and Japan Partner to Create a $600 Million Climate Fund

India's National Investment and Infrastructure Fund (NIIF) and the Japan Bank for International Cooperation (JBIC) have jointly initiated a $600 million fund dedicated to climate and environmental projects, commencing on October 4th.

The Indian government will provide 49% of the targeted funding for this India-Japan fund (IJF), marking NIIF's inaugural bilateral fund. The remaining 51% will come from JBIC, as reported by Mint.

The IJF's primary focus will revolve around investments in environmental sustainability and strategies to reduce carbon emissions. Its ultimate objective is to serve as a preferred partner to encourage increased Japanese investments in India.

The management of the fund will be overseen by NIIF Limited, with support from JBIC IG, a subsidiary of JBIC, aimed at promoting Japanese investments within India. Established in 2015, NIIF operates as a sovereign wealth fund, designed as an investment platform for both international and Indian investors.

The government possesses a 49% stake in the fund, while the remaining 51% is held by domestic institutional investors, sovereign wealth funds, international pension funds, and entities like the US International Development Finance Corporation (USIDFC), as well as multilateral development banks such as the Asian Infrastructure Investment Bank (AIIB), Asian Development Bank (ADB), and New Development Bank (NDB).

The creation of the India-Japan Fund signifies a pivotal moment in the strategic and economic partnership between the Governments of Japan and India.

IJF intends to prioritize investments in environmental sustainability and strategies for minimizing carbon emissions, striving to become a significant contributor to bolstering Japanese investments in India.

The establishment of IJF represents a major milestone in the strategic and economic alliance between Japan and India. The fund is committed to actively investing in India's environmental preservation sector, including areas like renewable energy, e-mobility businesses, and circular economy segments such as waste management and water treatment.