India

Decarbonizing the transport sector by expanding electric vehicle (EV) manufacturing and adoption in addition to developing the required charging infrastructure and battery storage will be critical to realizing India’s low-carbon, climate-resilient development goals. Despite early progress, further financing support across the EV value chain is required to drive uptake against more cost competitive, higher-emissions alternatives.

Electric vehicle adoption is critical to meeting the country’s 2070 net-zero target, in addition to supporting domestic emissions abatement. CFLI India’s solutions support the Government of India’s national EV policy –  the Faster Adoption and Manufacturing of Electric Vehicles Scheme – and work towards the NITI Aayog’s ambitions to achieve 30% of EV sales by 2030.

An estimated $266 billion billion is needed across India’s e-mobility ecosystem in areas such as component manufacturing, batteries, and grid and charging infrastructure.

CFLI India members are driving the adoption of electric vehicles in India by offering attractive leasing and financing for EVs, promoting grid infrastructure upgradation and funding, and advocating for policy support to attract further private investment across the EV value chain.

Mobilizing capital to aid the electrification of India’s road transport will not only help the country reach its investment goal but also provide an opportunity to capitalize on this growing market, which is expected to be valued at over $100 billion at the end of the decade.

600 million Indians face high-to-extreme water stress. As climate-related weather events increase, India’s water, sewage, and waste infrastructure will continue to come under severe strain. State level water infrastructure improvements are needed to ensure water security in India and require alternative funding sources to meet the estimated $373 billion forecasted need through 2040.

CFLI India members complement the Government of India’s efforts such as the Swach Bharat Mission-Urban 2.0 and AMRUT (Atal Mission for Rejuvenation and Urban Transformation) Mission to encourage the development of India’s circular economy at the municipal level and increase the operational sewage treatment capacity of Urban Local Bodies. 

Mobilizing climate finance for wastewater treatment and reuse will secure an increase in potable water, ensure that gray and black water are effectively managed, and develop a scalable framework for public-private collaboration to pursue state and municipal level circular economy projects.

Rapid industrialization is bolstering India’s steel, cement, and chemical industries, all of which emit considerable levels of carbon dioxide into the atmosphere. Industrial carbon dioxide emissions from steel and iron are expected to increase more than three-fold by 2050, signifying a need for decarbonization solutions to support India’s energy transition.

However, encouraging offtake for decarbonizing technologies such as green hydrogen can be challenging due to high capital costs and a lack of incentives or revenue models. In other cases, the necessary technologies require further development to reach commercialization.

The Government of India has signaled, through its National Green Hydrogen Mission, an ambition to build leading domestic expertise around leveraging green hydrogen technology for industrial decarbonization. CFLI India members support the country’s burgeoning green hydrogen industry as developers of green hydrogen plants, financiers of hydrogen projects, and potential consumers of green hydrogen.

An enabling environment that mandates domestic offtake, facilitates supply, and creates enabling infrastructure is necessary to promote the development of green hydrogen and its derivatives in the country.

CFLI India members are developing green ammonia production – a derivative of green hydrogen used in fertilizer and as a green fuel – and delivering a private sector perspective on policy measures required to unlock financing for green hydrogen production.

As a consumer, manufacturer, and exporter of green hydrogen and ammonia, India can decarbonize its industrial and energy sectors and reduce its dependence on the import of fossil fuels.

By 2027, demand for power in India is expected to increase 41% from ’21-‘22 levels. India’s focus on renewables will help low-carbon projects fuel a significant portion of the increased energy demand and will require corresponding infrastructure improvements. Efficiently integrating these renewables into transmission and distribution infrastructure will be vital to transitioning from carbon intense energy sources and solving recurring supply and demand challenges.

While private lenders and investors are financing utility-scale renewables, additional private finance will be required to reduce reliance on public finance. This will drive grid infrastructure investments, innovations in grid-scale storage, and other smart-grid technologies.

CFLI India members support the development of India’s renewable energy market and enabling infrastructure. In particular, members support the government’s commitment to generate approximately 50% of power by 2030 from non-fossil fuel-based energy sources.

Legislative, policy, and regulatory changes coupled with public-private finance of approximately $223 billion will be required to de-risk renewable energy projects and provide energy price security to consumers.

CFLI India members are supporting the development of wholesale and flexible power markets through the development of a market-based mechanism that would serve as an alternative to long-term Power Purchase Agreements for distribution companies designed to reduce investment risk and, by extension, potential costs of renewable energy development.

Improving the bankability of renewable energy projects will support the country’s adoption of new or less established renewable technologies and in meeting its long-term energy transition goals.