At the World Renewable Energy Technology Congress in New Delhi India’s Power Minister Piyush Goyal highlighted India’s efforts on clean energy and how technology innovation and redirecting of investments to renewable energy is helping India achieve economic development while reducing fossil fuel use.
According to the Indian government, achieving India’s solar target of 100 GW by 2022 would require at least $100 billion in investment over the next six years. An even a greater amount of financing is needed to achieve India’s 2030 Paris targets. Both, public and private capital are needed to achieve clean energy targets.
NRDC and the Council on Energy, Environment and Water has been engaging with over 80 stakeholder since last one year for developing a unanimous opinion on creation of specialized green investment fund for clean energy funding.
They have narrowed down to the idea of creating a ring-fenced pool of patient capital that is dedicated to accelerating the flow of finance to under-served clean energy markets. The solutions is popularly known as green investments banks.
A green fund would increase the availability of low-cost, long-term private financing, especially in clean energy market segments that are under-served today, such as rooftop solar, as well as market segments that are on the horizon in advancing clean energy. Green funds amplify the impact of limited government funds by using public funds as a financial lever to attract private investments for clean energy development.
The key role for the green fund is to help existing entities to be more effective and focus on growing the market with its expertise and the flexibility to cater to proven but under-served markets. A fund with more patient capital and deeper clean energy finance expertise that leads market transformation. In addition to direct lending at lower rates, the green investment fund will offer financial products that help make commercial banks more comfortable with financing clean energy projects, such as partial credit guarantees or credit insurance.
Hope this idea takes a final shape and is implemented by Government of India soon.