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The Small Industries Development Bank of India (SIDBI) has secured approval from the Green Climate Fund (GCF) for its first-ever green climate project, the Avaana Sustainability Fund (ASF), to invest $120 million in climate-focused firms.

The investment includes $24.5 million from South Korea-based GCF, the world’s largest climate fund.

The ASF project aims to invest in early-stage companies harnessing technology-led innovation to spur climate solutions and sustainability in India, including climate change mitigation, adaptation, and the enhancement of resilience in vulnerable sectors of the Indian economy.

Under the new project, SIDBI will liaise with key stakeholders and ministries, including the Department of Financial Services of the Ministry of Finance. With the capacity to anchor proposals from other entities and submit its own, SIDBI said it is committed to promoting and financing the development of micro, small, and medium enterprises (MSMEs).

SIDBI said it actively supports national action plans on climate change and champions responsible business practices, including sustainable financing and energy efficiency initiatives within the MSME sector.

The move marks the success of the first project anchored by SIDBI and the first one secured for India in the past few years by an Indian-accredited entity.

With several additional projects in the pipeline, SIDBI is steadfast in its commitment to advancing India’s Nationally Determined Contributions (NDCs), effecting substantial global change through its proficiency in green and climate finance, it said in a statement.

The Green Climate Fund is mandated to assist developing countries in raising and realising their NDC ambitions. The GCF expedites transformative climate action through a partnership-driven approach and the deployment of flexible financing solutions and climate investment expertise.

The fund’s investment strategy targets four significant transitions: built environment; energy industry; human security, livelihood, wellbeing; and land use-forests and ecosystems, employing four key approaches.