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India’s cleanable vigor modulation is gaining momentum. In 2024, India added 24.5 gigawatts (GW) of star vigor capacity, making it the 3rd largest contributor globally aft China and the United States, making it a cardinal subordinate successful the planetary displacement towards renewables.
The United Nations Secretary-General’s 2025 Climate Report recognises India, alongside Brazil and China, arsenic a starring processing state successful scaling star and upwind energy. In 2023, the renewable vigor assemblage employed implicit a cardinal people, contributing to 5% of GDP growth. Of this, off-grid star unsocial employed implicit 80,000 radical successful 2021. India’s enactment successful establishing the International Solar Alliance (ISA) is laudable.
The captious gap
But this awesome momentum needs a accordant push. Beneath the headlines lies a captious spread — the fiscal scaffolding that is needed to prolong and standard this transition. Without a melodramatic enlargement of clime finance, India volition conflict to conscionable its clime targets.
The economical lawsuit for cleanable vigor has coagulated basis. According to the International Renewable Energy Agency (IRENA), if India follows a 1.5°C-aligned pathway, it could execute mean yearly GDP maturation of 2.8% done 2050, much than treble the G-20 average. Battery-integrated renewables, decentralised grids and greenish hydrogen technologies are each creating caller opportunities for inclusive, future-ready growth. Yet, this momentum hinges connected the missing portion of clime finance.
The size of India’s clime concern spread is wide. Recent estimates bespeak a request of $1.5 trillion by 2030 to enactment connected a 1.5°C pathway, portion the Ministry of Finance places the fig astatine implicit $2.5 trillion by 2030 to conscionable nationalist targets. This includes superior for expanding renewables, strengthening the energy grid, deploying artillery storage, scaling up greenish hydrogen, and transitioning to sustainable transport and agriculture. The existent travel of clime concern falls good abbreviated of this target.
By December 2024, India’s cumulative aligned green, social, sustainability and sustainability-linked (GSS+) indebtedness issuance had reached $55.9 billion, representing a 186% summation since 2021, with greenish bonds accounting for 83% of full aligned issuance. The trajectory remains strong, with greenish enslaved concern successful India crossing $45 cardinal successful 2025, and sustainable concern targets aiming for $100 cardinal by 2030, indicating robust backstage assemblage engagement.
However, the situation of expanding beyond ample corporates remains valid. While the backstage assemblage was liable for 84% of the full greenish enslaved issuance, entree for micro, small, and mean enterprises, agri-tech innovators, and section infrastructure developers continues to request enhancement done concessional concern and risk-sharing mechanisms. India’s palmy star vigor auctions nether the Solar Park Scheme person been cited arsenic 1 inaugural successful enactment of attracting backstage financing. Similarly, India’s issuance of sovereign greenish bonds and the occurrence of Securities and Exchange Board of India (SEBI)-regulated societal bonds person channelled backstage superior into clime action, acquisition and wellness care.
Changes to strategy
To unlock this spread successful finance, India indispensable diversify and deepen its clime concern strategy, starting with nationalist finance. National and State governments tin usage Budget allocations and fiscal tools to pull backstage superior and de-risk greenish investments.
Blended concern tin span this divide. While concessional concern and risk-sharing mechanisms are often referenced, determination is simply a request to analyse however they enactment crossed sectors, scales and capitalist profiles. Credit enhancement instruments specified arsenic partial guarantees oregon subordinated indebtedness tin amended the risk-return illustration of greenish projects, making them much charismatic to backstage lenders. Similarly, show oregon indebtedness guarantees tin unlock concern for mid-sized cleanable vigor infrastructure successful Tier II and III cities, wherever governance and transportation risks whitethorn deter investors.
Scaling specified models volition necessitate unlocking home organization capital, from pension funds, insurers and sovereign wealthiness funds. India, too, tin unlock akin imaginable by enabling its organization investors specified arsenic the Employees’ Provident Fund Organisation oregon the Life Insurance Corporation, to allocate a information of their portfolios to climate-aligned investments. This would necessitate regulatory reforms specified arsenic clearer environmental, social, and governance concern guidelines, hazard mitigation instruments and semipermanent greenish task pipelines.
Tap c markets
Policy and organization enactment are critical. Carbon markets connection different avenue. India’s caller Carbon Credit Trading Scheme could unlock caller concern streams if it is transparent, good regulated and equitable. Equally urgent is financing for adaptation and nonaccomplishment and damage.
India indispensable pb not conscionable connected cleanable vigor but besides connected clime concern innovation, with visible, scalable breakthroughs. This tin beryllium done blockchain for tracking clime finance, Artificial Intelligence-driven hazard appraisal for greenish portfolios, oregon tailored blended concern models that bespeak India’s unsocial social, biology and economical realities.
Flavia Lopes is Programme, United Nations Environment Programme (UNEP) India. Balakrishna Pisupati is Head, United Nations Environment Programme (UNEP) India. The views expressed are personal
