India's Clean Energy Transition
India is making significant strides in its transition to clean energy, notably in solar energy, positioning itself as a global leader in renewable energy.
Achievements in Clean Energy
- In 2024, India added 24.5 GW of solar energy capacity, becoming the third-largest contributor globally after China and the United States.
- The UN Secretary-General's 2025 Climate Report acknowledges India as a leader in scaling solar and wind energy.
- In 2023, the renewable energy sector employed over a million people, contributing to 5% of India’s GDP growth.
- India played a key role in establishing the International Solar Alliance (ISA).
Challenges in Climate Finance
Despite progress, India faces a significant climate finance gap essential for sustaining and scaling its clean energy transition.
- Estimates indicate a requirement of $1.5 trillion to over $2.5 trillion by 2030 to meet climate targets.
- Climate finance is currently insufficient, with a need for substantial expansion.
Current Financial Landscape
- By December 2024, India issued $55.9 billion in green, social, sustainability, and sustainability-linked debt, with green bonds representing 83% of this.
- Green bond investment in India is projected to surpass $45 billion by 2025.
Strategies for Enhancing Climate Finance
India needs to diversify and deepen its climate finance strategies through public and private sectors.
- Utilize budget allocations and fiscal tools to attract private capital and de-risk investments.
- Deploy blended finance and credit enhancement instruments to make green projects more attractive to private lenders.
- Unlock domestic institutional capital from pension funds and insurers.
Policy and Institutional Support
- Carbon markets, such as the new Carbon Credit Trading Scheme, could provide new finance streams.
- Focus on financing adaptation and loss and damage.
- Innovative approaches like blockchain and AI can play a role in tracking and assessing climate finance.
The authors, Flavia Lopes and Balakrishna Pisupati, work with the United Nations Environment Programme (UNEP) India and provide their personal views on the matter.
