Policy and Regulation

India has set ambitious Nationally Determined Contribution (NDC) targets that it needs to meet by 2030. Reducing emissions by transitioning to clean and renewable sources of energy plays an important role in meeting these targets. India requires roughly INR 11 lakh crores (USD 170 billion) per year for climate action. While clean energy finance flows in the country are growing, meeting India’s climate goals will require proportionate investment increases at the sectoral level.

A strong policy and regulatory landscape is key to increasing the flow of investment capital in the country. Concepts like clean energy financing and green financing are relatively new, and the risk perception for such investments is high. Strong policies indicate governmental support for clean and energy projects and can prove valuable in heightening investor confidence in these ventures.

The government has shown its support for clean energy projects by setting aggressive targets and putting in place supportive policies that can help the country meet these targets. However, there is a lot more that needs to be done in order to ensure a stronger green finance landscape in the country. Optimising and maximising green finance flows within and into the country requires India to have clear frameworks and standardized processes in place. The lack of a harmonized definition of green finance, the absence of a climate-related financial disclosure policy in the country, large variations in granularity, format, and categorization of data at the state-level and the absence of an integrated domestic measurement, reporting and verification (MRV) system are some of the challenges facing the country’s green finance landscape at present.

Shakti Sustainable Energy Foundation enables the development of policy solutions that reduce the perceived risks of financing clean energy investments and enable the scale up of clean energy financing.