The CETFI inaugural Summit recommended six models to usher in more climate finance.
The Summit witnessed over 300 business leaders representing all major developers in the nation, development finance institutions and commercial investors. The deliberations allowed us to unravel a number of structural constraints and propose the following solutions:
Establishing a definitive market structure early in the lifecycle will build tremendous confidence with the investors. This can be delivered through two critical interventions: (a) establishing a Market-Maker entity that offers long-term offtake agreements and (b) creating a national risk register for various segments.
The debate on climate finance has to shift its focus to bringing wholesale finance into the nation and sectors – including establishing a financing continuum, enabling faster churn of capital, building linkages to institutional finance, developing more fund-of-funds, issuing more green bonds and creating a sovereign Fx-hedging facility.
Availability of Blended and long-term concessionary finance will be critical to accelerating the rate of energy transition. This is done through cataloguing and implementing an extensive library of financial structures and instruments.
Making technologies affordable and available is of paramount importance if we are to achieve the decarbonization targets. Trans-national collaborations are critical in making technologies emerging-markets ready. India can and will play a crucial role in establishing a technology acceleration hub.
More concerted efforts are required to establish a global carbon finance mechanism and pricing. This is the single most powerful instrument that will bring a level playing field for all market participants and provide a just and equitable pathway to decarbonization for all nations.
The recommendations should be demonstrated through a portfolio of high-impact Lighthouse Projects. Investing in these projects should be in a “no-regret” mode as the projects will not only establish invaluable benchmarks for technology and engineering, but also for policies, regulations and pricing.
Closing the Summit, in a townhall style session with business leaders and investors, Shri Tarun Kapoor, Advisor to the Prime Minister, Government of India said that India stands committed to a faster energy transition, and that industry, investors and governments all need to work together to making that happen.
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