Non-banking financial company Northern Arc Capital Ltd has raised about $28.5 million (Rs 200 crore) in debt funding from Dutch development bank FMO, it said in a statement. Northern Arc raised the funding by issuing rupee-denominated non-convertible debentures (NCDs) to FMO. It issued NCDs in two tranches of Rs 100 crore ($14.3 million) each. One tranche has been structured as a green bond to exclusively provide funding to non-banking finance companies that finance the purchase of solar lamps, clean cooking stoves, electric vehicles, and for the financing of water and sanitation loans. Kshama Fernandes, MD and CEO at Northern Arc Capital, said the funds will help the company provide debt to underserved households and small enterprises. Linda Broekhuizen, Chief Investment Officer at FMO, said: “This green bond is particularly interesting as the on-lending is in the financial inclusion area of under-banked end clients. This is breaking new ground and complementary to earlier green bonds that FMO has invested in, which ultimately support large-scale renewable energy projects.” Founded in 2008, Chennai-based Northern Arc Capital was formerly known as IFMR Capital. It caters to financial institutions across affordable housing, small business, vehicle, agriculture finance, small finance banks and microfinance.