SBI unit to raise Rs 2,000 crore for climate fund

A unit of India’s largest lender State Bank of India is planning to raise as much as Rs 20 billion ($237 million) through its third climate fund, according to people familiar with the matter.

SBI Ventures Ltd. plans to raise the money from multilateral institutions after approval from the company’s board, said people, who asked not to be identified as the information is private.

The fund will invest in small and mid-sized companies that are focused on recycling waste and curbing emissions among other initiatives, and obtain equity partnership, the people said.

State Bank of India and SBI Ventures didn’t immediately comment.

Green finance - that effectively funds projects with environmental benefits — is gaining momentum in India as a key tool for transitioning the economy toward net-zero emissions. India, the world’s third-largest carbon emitter, needs $12.4 trillion in investment to achieve its goal of reaching net zero by 2070, according to BloombergNEF.

While some of the existing investors in the previous two funds will contribute to the fund, new investors are also being sought, the people said.