GuarantCo to deploy $300 million to back climate and infrastructure financing in India

GuarantCo, a development finance institution backed by G12 governments, will deploy at least $300 million in guarantees in India to support climate-related and infrastructure financing, according to Nishant Kumar, Managing Director and Head of Asia Investments and Coverage (Asia) at PIDG. The programme is expected to unlock up to $600 million in debt funding over the next few years. The commitment was announced at a debt capital markets event held with the National Stock Exchange (NSE) last year.

Kumar said interest in India among global finance professionals has risen in recent years, especially around funding for climate and energy transition projects.

“People are talking about India,” he said.

In India, GuarantCo plans to focus on:

• Climate and sustainable infrastructure


• Development of local debt capital markets


• Financial inclusion and gender-linked financing

Kumar said one challenge in India is the limited participation of insurance companies, pension funds and infrastructure debt funds in providing long-term financing for infrastructure assets.

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He said such projects require stable funding for 15–20 years and that reducing risk helps attract long-term investors.

Kumar said GuarantCo has increasingly moved from supporting single projects to backing groups of projects.

He said this allows risk to be diversified and shared across assets, making financing more stable and efficient for lenders.

GuarantCo has underwritten more than $1.8 billion in guarantees since its launch in 2005, helping mobilise about $6–7 billion of private sector capital into infrastructure projects across Africa and Asia, according to Kumar.

He said GuarantCo’s mandate is to bring private investors into local capital markets in lower-income and lower-middle-income countries, including fragile and conflict-affected regions.

Kumar said the firm uses credit guarantees to make infrastructure projects safer for lenders and investors.

He explained that the guarantee is unconditional and payable on demand if a borrower defaults, unlike credit insurance, which requires proof of loss and a waiting period.

“We make the investor whole,” he said.

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He added that this structure allows banks and financial institutions to provide long-term funding for infrastructure projects on a sustainable basis.

Kumar said GuarantCo only enters transactions where its involvement reduces risk and lowers borrowing costs for project owners.

He said this approach attracts institutional investors and can also work for retail investors over time, as such instruments offer stable credit quality and predictable returns.

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