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India needs around USD 1 trillion by 2030 to achieve its climate change adaptation target and will have to go for blended concessional finance to mobilize private investments.
“As per estimates in India’s long-term low emission development strategy, submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in 2022, the country needs tens of billions of dollars by 2050 to ultimately achieve net zero by 2070. Based on updated NDCs, India’s adaptation finance requirements stand at around $1 trillion by 2030,” International Finance Corporation said in its report.
A joint report by IFC and the International Energy Agency called for the scaling up of private finance for clean energy in emerging and developing economies as the public funding of this magnitude could be difficult to allocate, especially because of the need to route limited public funds towards immediate social priorities and contingencies.
“Investments need to more than triple from USD 770 billion in 2022 to USD 2.2-2.8 trillion per year by the early 2030s to help emerging markets reach their energy and climate goals. Around 60 per cent of this will need to come from the private sector,” the report stated.
Accordingly, there are several innovative financing instruments that can unlock private sector climate-related investments and blended concessional finance for climate is the one which has become a powerful tool to mobilize private investments.
Collaboration between public, private, and philanthropic capital is critical for unlocking development gains and addressing massive global challenges such as climate change.
“There is a need to access stable funding sources to meet these commitments and develop a broader and more mature sustainable finance ecosystem,” Wendy Werner, Country Head, India, IFC stated.
She said that it was imperative to boost efforts to mobilize sustainable finance to build a green and resilient economy, and the financial sector has a key role to play in scaling up climate finance in order to set India squarely on the net-zero path.
As Per Government of India estimates, the country needs to scale up climate investments from USD 18 billion per year to USD 170 billion per year to achieve its net-zero targets.
This article is from Entrepreneur.com
