As part of the NDCs, India has committed to generate 40% of its electricity needs from renewable sources by 2030. However currently, the share of renewable in electricity generation as of 2017 is only 15%. The biggest bottleneck to achieve the targets is adequate financing of the RE assets by both government as well as private firms. There is an estimated need of $ 100 billion in next six years to achieve the targets set by the country. With the current flow of approximately $785 million in the last year, it seems highly impossible to achieve the targets without having a clear road map of financing and investments in RE sector in India. Financial innovation must happen at both investments as well as at the consumer level.
Goal: To Mobilize Domestic and New & additional funds from developed countries to implement the above mitigation and adaptation actions in view of the resource required and the resource gap. USD 2.5 trillion (at 2014-15 prices) required for meeting India’s climate change actions between now and 2030 as per preliminary estimates. Ashden India, along with its 30+ winners of the prestigious Ashden Award aim to work the government of India, industry groups and national financial agencies of India to design a financial framework for renewable energy financing. This framework will enable the implementing agencies (public or private) to select suitable and applicable financial models while designing and implementing renewable energy projects, ranging from solar to biomass; and on grid project to off-grid project.
It is expected that the proposed financial framework will recommend six innovative financing mechanisms – and likely finance providers – for mobilising investment and looks at the benefits and challenges of each approach. These mechanisms include emission trading schemes; green bonds; international financial institutions; international and regional climate funds; government-backed funds; and equity capital.
Keshav C Das