India’s largest public sector bank, the State Bank of India (SBI), has entered into a significant climate-focused financing agreement with French development agency Agence Française de Développement (AFD). The two institutions signed a €100 million (approximately ₹900 crore) line of credit at SBI’s branch in GIFT City, Gujarat’s flagship international financial hub.

This collaboration is aimed at strengthening India’s green finance ecosystem by supporting a wide range of projects that reduce carbon emissions and increase resilience to climate change. The funding will be directed toward both mitigation and adaptation initiatives, spanning renewable energy, sustainable transportation, waste management, water efficiency, and climate-resilient infrastructure.

Boosting SBI’s Green Lending Ambitions

SBI highlighted that the agreement aligns with its long-term goal of raising the share of green loans in its overall domestic lending portfolio. The bank is targeting a green portfolio share of between 7.5 to 10 percent by 2030 as part of its sustainability roadmap.

“The bank has been actively sourcing lines of credit from international financial institutions and development banks to fund India’s transition toward a low-carbon economy,” said a senior SBI official. “Our collaboration with AFD represents a key step forward in this journey, helping us deliver high-impact, scalable climate solutions across the country.”

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Leveraging AFD’s Global Climate Finance Expertise

In addition to the financial support, the partnership will also give SBI access to AFD’s international experience in structuring sustainable projects. This includes technical support in areas such as climate risk assessment, ESG compliance, and the adoption of innovative green technologies.

AFD’s involvement is expected to enhance the quality and scope of projects financed under this facility, ensuring that they meet both Indian and international environmental standards. For SBI, this also presents an opportunity to deepen its capabilities in green credit evaluation and project monitoring.

SBI’s Expanding Focus on Sustainability

The agreement comes at a time when SBI is strengthening both its digital transformation and sustainability agenda. With a deposit base exceeding ₹54.7 lakh crore as of June 2025, SBI is well positioned to influence India’s financial direction on climate and environmental issues.

The bank has also introduced internal frameworks to evaluate green projects, launched sustainability-linked financing instruments, and is increasingly aligning its operations with global ESG benchmarks. Partnerships like this one with AFD further cement its position as a key player in India’s sustainable finance market.

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A Model for Future Development Finance Collaborations

The SBI-AFD pact demonstrates the growing role of international development finance institutions in supporting India’s green transition. As global climate finance becomes more collaborative and outcome-driven, such partnerships offer a model for channeling capital into projects that deliver both environmental and economic returns.

With India aiming to meet its ambitious net-zero and renewable energy goals, collaborations like this will be vital in closing the climate finance gap and accelerating nationwide decarbonization.

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