India’s goal to ramp up its solar and wind energy capacity could get a major boost through two fast-growing financing innovations — green banks and green bonds, said a new analysis released on May 4. The analysis was released by the Indian Renewable Energy Development Agency (IREDA) in partnership with the Council on Energy, Environment and Water (CEEW) and the Natural Resources Defense Council (NRDC). Noting that the availability of finance has not kept pace with the commitments made by developers, the analysis said that establishing a green bank and accessing green bonds could help overcome this key market barrier.
Green banks are public entities created to work with the private sector to increase investment in clean energy and bring clean energy financing into the mainstream. They are innovative and new tools that have been successful in the United Kingdom, Australia, Japan, Malaysia and several states in the US, a CEEW statement said. “India’s goal to dramatically ramp up solar and wind energy capacity could get a major boost through two fast-growing financing innovations — green banks and green bonds,” the statement said. India needs as much as Rs 17.5 trillion or approximately USD 264 billion in financing to reach its target of producing 160 gigawatts of power from solar and wind energy by 2022.
The clean energy target is the centerpiece of India’s climate pledge announced in the international Paris climate agreement recently signed by more than 170 countries at the United Nations. Releasing the reports, Power Minister Piyush Goyal said the government is committed to achieving the renewable energy targets and added that more can be done with longer-term and low-cost international financing. He urged other countries to do their part in taking stronger action on climate change, the minister said, according to the statement. “Attractive low-cost finance for clean energy projects is crucial for tapping into India’s vast clean energy potential and for transforming India into a low-carbon economy,” said Arunabha Ghosh, CEEW CEO.