Japan's JICA to boost ties with the private sector to fund urban infra in India

“JICA India is actively exploring various approaches to mobilize private finance in the urban infrastructure sector. These efforts are being pursued through concessional loans (yen loans), technical cooperation, surveys, and the Private Sector Investment Finance (PSIF) scheme, etc.," Shogo Suzuki, spokesperson, JICA India office, told Mint over email.

“While sovereign lending remains a core modality, JICA India is also working to expand collaboration with sub-sovereign entities, as well as co-creation with private sector partners," he added.

JICA is prioritizing sectors where blended finance—where public funds combine with private investments to create infrastructure projects such as roads and housing—can deliver the greatest impact.

These projects include mass transit through public-private partnerships (PPP) to boost efficiency and ease fiscal pressure; water and sanitation via PPP and private O&M (operations and maintenance) models to improve service delivery; waste management by supporting recycling and waste-to-energy projects with viable revenue streams; and affordable housing through concessional financing to attract private capital for underserved communities, Suzuki said.

“By integrating concessional funding with technical support, JICA aims to catalyze more sustainable and inclusive urban growth in India," Suzuki added.

To be sure, JICA has collaborated with several Indian state governments to advance blended finance initiatives across diverse sectors.

Blended finance combines concessional funding from public or development institutions with private capital to make projects financially viable while reducing risks for investors.

While most of these partnerships are formalized through the central government, the agency’s funding and technical expertise are directed toward specific state-led initiatives.

In India, JICA has financed key infrastructure projects including the Delhi Metro, Mumbai Trans Harbour Link (Atal Setu), the Dedicated Freight Corridor, and urban development initiatives in Chennai and Hyderabad.

It is also partnering with the government on the Mumbai-Ahmedabad High-Speed Rail project.

“JICA plays a key role in meeting the funding needs of public large-scale projects by providing long-term, low-interest concessional loans. On top of that, we recognize that JICA’s technical cooperation to support institutional development and capacity building is also efficient," Suzuki said.

“In addition, JICA leverages its PSIF scheme to provide equity and debt financing to private sector initiatives, thereby helping to mitigate risks and attract further investment," he said, adding that such collaborative models are critical to bridging India’s growing urban infrastructure financing gap while fostering innovation and sustainability.

On 25 September, Mint reported that the central government has asked state-backed development finance institutions (DFIs) to share the cost of developing urban infrastructure with multilateral agencies.

According to the report, the ministry of finance has advised DFIs to explore blended finance partnerships with institutions such as the World Bank, Asian Development Bank, and JICA.

Meanwhile, the JICA official noted that India continues to face a significant urban infrastructure financing gap, especially at the local government level.

“JICA believes that blended finance, combining concessional and private capital, can play a key role in bridging this gap. In addition to the above-mentioned scheme, JICA offers a range of financing instruments such as Two-Step Loans—which channel funds through local financial institutions—and PPP finance support, including assistance for project structuring and capacity development," he said.

“These tools are designed to enhance bankability and promote sustainable infrastructure development," Suzuki added.