India needs $500 bn by 2030 to decarbonise key sectors: CEEW report | Economy & Policy News

India needs $500 billion in climate investment by 2030 across 20 low-carbon technologies in three sectors, including power and renewables, green hydrogen and electric mobility, according to a report jointly launched on Tuesday by the Council on Energy, Environment and Water’s Green Finance Centre (CEEW-GFC) and Tata Sons.

The report states that $198 billion is required in the power and renewables sector and $115 billion in green hydrogen, with the remainder needed for electric mobility. It finds that unlocking 10 per cent of the total amount through blended finance could help build a track record for the rest of the money to follow without support.

The report, titled “Blended Finance for India’s Climate Goals”, further states that the $50 billion could be mobilised with just $10 billion in catalytic capital, indicating that every dollar of catalytic capital mobilises five dollars in blended finance.

It quantifies how blended finance could help India meet its 2030 decarbonisation targets across power, industry and mobility, the three sectors that account for 70 per cent of the country’s greenhouse gas emissions.

At the sectoral level, power and renewables require $1.5 billion in catalytic capital through 2030, green hydrogen needs $5.9 billion, and electric mobility needs $2.7 billion, the report said.

“India’s development path calls for decarbonisation while continuing to industrialise, urbanise and expand prosperity. These twin imperatives place extraordinary demands on our energy systems, industries and mobility networks,” said N Chandrasekaran, chairman, Tata Sons, adding that conventional finance alone would be insufficient. “India needs capital willing to absorb early risks, remain patient and accept lower near-term returns in pursuit of much larger long-term gains,” he added.

Between 2010 and 2022, India recorded $5.6 billion in blended finance transactions, or 3.4 per cent of the global market, of which only 17 per cent was catalytic capital, the report states. To increase blended finance transactions for low-carbon technologies, the report proposed a National Green Finance Institution, as recommended by NITI Aayog, to aggregate catalytic capital from governments, philanthropies and development partners and deploy it through blended finance structures.

Given geopolitical uncertainties, it also proposed looking inward to domestic philanthropies to use catalytic capital to crowd in commercial capital more effectively and called for an enabling policy and regulatory environment for the same.