The Asian Infrastructure Investment Bank has signed a $100 million debt facility with IIFL Home Finance Ltd. to expand access to affordable housing finance for economically weaker sections and low-income groups in India, the multilateral lender said on Monday.

The funding, provided in Indian rupees, will also support the development of green-certified housing projects, aligning with India’s climate goals and government initiatives such as the Pradhan Mantri Awas Yojana – Urban 2.0.

“This investment reflects AIIB’s commitment to inclusive and sustainable infrastructure,” said Gregory Liu, director-general of AIIB’s Financial Institutions and Funds Clients Department. “By partnering with IIFLHF, AIIB is helping to advance India’s green building agenda while bridging the housing gap for low-income families.”

Tackling Urban Housing Shortage

India continues to face a substantial urban housing shortage, especially among EWS and LIG households, who often lack access to formal housing finance and live in inadequate or informal dwellings.

Developers also struggle to finance affordable housing projects due to high input costs and land prices.

The AIIB facility is structured to support both the demand and supply sides of the affordable housing ecosystem. It will allow IIFLHF to provide housing loans to EWS and LIG borrowers while also financing developers building affordable housing units.

A portion of the funds will be allocated to support IIFLHF’s green housing initiatives, incentivizing the adoption of eco-friendly building standards and certifications.

Support for India’s Climate Goals

The investment is aligned with India’s Nationally Determined Contributions under the Paris Agreement and reinforces AIIB’s Sustainable Cities Strategy and Green Infrastructure priority, combining social impact with environmental sustainability.

Monu Ratra, executive director and CEO of IIFLHF, said the funding would help the company reach more first-time homebuyers while promoting resilient and sustainable housing.

“It will strengthen our efforts to enhance the reach and impact of green, affordable housing solutions,” he said. “We are honored to partner with AIIB in advancing this shared vision.”

First Collaboration Between AIIB and IIFLHF

The partnership marks AIIB’s first engagement with IIFLHF and broadens its collaboration with India’s non-banking financial companies, laying the groundwork for future initiatives aimed at inclusive and climate-resilient urban development.

Founded in 2016, AIIB is a Beijing-based multilateral development bank with 110 member countries and $100 billion in capital. It is rated AAA by major international credit agencies.

IIFLHF, an NBFC focused on affordable housing, has served over 454,000 customers as of March 2025. Its footprint spans 376 branches across 18 Indian states, with a particular focus on underserved Tier 2 to Tier 4 towns and suburban areas.