The Climate Finance Leadership Initiative (CFLI) India and Michael R Bloomberg on Friday announced climate finance solutions with the potential to mobilise more than $6.5 billion in support of India’s low-carbon, climate resilient development at COP28.
With support from the Government of India, CFLI India’s members, including CEOs of leading Indian and international financial institutions and businesses, have worked alongside the multilateral development community to originate innovative financing solutions and strengthen India’s policy enabling environment.
Across e-mobility, circular economy, green hydrogen, and renewables, CFLI India’s climate solutions are focused on sectors aligned with the Government of India’s climate priorities and can be scaled across India and exported globally.
Over the next decade, these solutions will help mobilise private capital towards the $10.1 trillion needed to meet India’s net-zero target by 2070, CFLI India said.
Bloomberg noted that the culmination of this public-private partnership will help India accelerate its clean energy transition and offers the way forward for India and others to reach net-zero targets while also improving public health, creating jobs, and building a stronger and more resilient economy.
“India needs very large investments to achieve the global 1.5-degree pathway in line with the Paris Agreement. CFLI India was formed with an objective of accelerating investment in sustainability sectors in India. Over the last two years, CFLI India members have partnered in developing concepts to address complex issues across themes such as e-mobility, circular economy for water and renewable energy. The concepts include innovative financial structures across the public and private sector for circular water economy, new financial products targeted to increase e-mobility adoption, and catalysing investments for green ammonia and grid upgrades,” said N Chandrasekaran, who is the Chairman of Tata Sons and Co-Chair of CFLI India.
As part of the efforts to mobilise finances, CFLI India member Tata Motors announced partnerships with State Bank of India, HSBC India, HDFC, Axis Bank and Tata Capital to offer attractive loans and leasing solutions for small commercial and retail electric vehicles, with a target of driving 10-12 per cent EV penetration by 2030. The market opportunity in India of this financing mechanism is $2.4-3 billion through 2030.
Similarly, Tata Group and Larsen & Toubro have originated innovative financing structures, specifically a partial risk guarantee vehicle, to enable Public-Private Partnerships (PPPs) at a municipal level.
Scoping studies are being discussed with the Government of Maharashtra to identify potential projects. Such structures could have the potential to unlock $2 billion worth of private capital via PPPs by 2030.
Tata Group and Larsen & Toubro are exploring opportunities to work with the World Bank to improve municipal finance in Indian cities.
GIC Private’s affiliate signed an agreement with AM Green, set up by Greenko’s founders, and Gentari, the clean energy division of Malaysia’s oil company Petronas.
This partnership aims to produce 5 million tonnes per annum (MTPA) of green ammonia by 2030. This is expected to accelerate efforts to achieve net zero targets in India as well as in OECD markets.
AM Green Ammonia Holdings will be a fully funded platform under AM Green. It will invest, in phases, in the Indian region of Andhra Pradesh, Tamil Nadu, Gujarat, Karnataka, and Himachal Pradesh. The completion of the transaction is subject to fulfilment of relevant and customary condition precedents.
Climate Finance Leadership Initiative (CFLI) was formed in 2019 by Bloomberg, at the request of the United Nations Secretary-General, António Guterres, to lead a private sector initiative to tackle the challenge of unlocking climate finance at scale in emerging markets.
It has launched country pilots in India and Colombia that convene leading private-sector institutions across the financial value chain to work alongside corporates, policymakers, and multilateral institutions, to identify barriers to investment and deliver catalytic financing and policy solutions that accelerate the deployment of private capital for critical low-carbon, climate-resilient projects.