Published: 25th Apr, 2024
Context
To address India’s escalating need for green financing, National Bank for Agriculture and Rural Development (NABARD) unveiled its Climate Strategy 2030 document on the occasion of Earth Day.
1: Dimension-Need to focus on Green Financing
- Green finance, which aligns financial investments with sustainable and eco-friendly projects, has emerged as a pivotal force in fostering the advancement of renewable energy in India.
- India’s commitment to renewable energy, aiming to achieve 500 GW of renewable energy capacity by 2030, requires green funding.
- While facilitating the expansion of renewable energy infrastructure, green finance contributes to a reduction in the carbon footprint.
2: Dimension-Challenges in the sector
- Insufficient green finance: India requires approximately USD 170 billion annually to reach a cumulative total of over USD 2.5 trillion by 2030, current green finance inflows are critically insufficient.
- As of 2019-20, India garnered about USD 49 billion in green financing.
- Minimal private sector engagement: With the majority of funds earmarked for mitigation, only USD 5 billion was allocated towards adaptation and resilience.
- Viability issues: Private sector is showing less interest in these areas due to challenges in bankability and commercial viability.
- Other hurdles:Issues such as project risks, policy uncertainties, and the need for standardized green finance metrics pose hurdles for the sector.
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Fact Box: NABARD’s Climate Strategy 2030
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