Climate Investment
Opportunities in South Asia
India
With a population of 1.3 billion,
the world’s third-largest economy
according to purchasing power parity,
and a young, large, and growing labor
force, India is a significant market for the
private sector.
Its government is pursuing an agenda of “development without
destruction”, aiming to reduce the emissions intensity of its GDP
by up to 35 percent from 2005 levels by 2030. India’s Nationally
Determined Contribution (NDC) under the Paris Agreement
reflects the government’s ambitious domestic policy targets
for renewable energy, urban infrastructure, and industry and
recognizes the challenges that climate change will pose. As India
works to deliver universal electricity access and address rapid
Transport
urbanization, this creates business opportunities. The country’s Infrastructure
private sector is responding quickly to the opportunities created $250B
by the NDC and domestic policy goals and is taking every
Electric Green
chance to make climate-smart investments marketable. vehicles buildings
$667B $1.4T
India's
climate-smart
investment potential
(2018–2030)
Renewable
Waste
energy
$11B $3T $448B
Urban
Agriculture
water
$128B $194B
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IFC estimates a total climate-smart investment opportunity of $3.1 trillion
in India from 2018 to 2030:
$ 4 4 8 B I L L I O N I N R E N E W A B L E E N E R G Y , created by the large
scale, strong government commitment to install 175 GW of capacity by 2022,
and the NDC target which aims for 40 percent of installed capacity to come
from renewable sources by 2030
$ 1 . 4 T R I L L I O N I N G R E E N B U I L D I N G S arising from rapid
urbanization, policy incentives for green construction, and the fact that 70 percent
of buildings needed by 2030 are yet to be built
$ 2 5 0 B I L L I O N I N T R A N S P O R T I N F R A S T R U C T U R E to help
achieve a modal shift from private to public transport, and $ 6 6 7 B I L L I O N
I N E L E C T R I C V E H I C L E S to meet the government’s goal of electrifying
all new vehicle sales by 2030
$ 1 1 B I L L I O N I N M U N I C I PA L S O L I D W A S T E M A N A G E M E N T
to bridge the gap between the significant amount of waste produced and the
availability of appropriate infrastructure for solid waste management to 2030
$ 1 2 8 B I L L I O N I N C L I M AT E - S M A R T U R B A N W AT E R to collect,
treat and manage urban wastewater, and help alleviate urban India’s water stress
$ 1 9 4 B I L L I O N I N C L I M AT E - S M A R T A G R I C U LT U R E to
boost agricultural productivity, enhance resource efficiency and resilience, and
modernize India’s agricultural sector
2 Climate Investment Opportunities: South Asia
Priorities for India to Attract
More Climate-Smart Investment
Implementing demand-side reforms, enhancing grid flexibility, minimizing
curtailment rates, and clarifying the withdrawal of any incentives for renewable
power will be essential to ensuring continued expansion of the sector. This will
be further bolstered by enabling and promoting investments in energy storage
to improve grid management. Involving private companies in establishing
standardized supporting infrastructure for electric vehicles, will be important for
the sector’s development. Key to the development of the green buildings sector
will be addressing the lack of public awareness and the high cost of borrowing,
and better labeling and a voluntary disclosure approach would allow customers
to distinguish between developers/buildings based on their compliance with
green building codes.
IFC Advisory and Investment Spotlights
A Z U R E C L E A N E N E R G Y P R I VAT E L I M I T E D
J A I N I R R I G AT I O N S Y S T E M S (2009–2016)
LIMITED (2007–2012)
As one of the first solar companies in the country, Azure Power has played a
In 2010, IFC partnered with Jain Irrigation catalytic role in building a market that is now thriving. Supported by a broad
Systems Limited, one of the world’s largest range of IFC’s financial products and services, the company’s capacity has
manufacturers of micro drip irrigation reached 500 MW distributed in 25 plants and several commercial rooftop
systems and other agricultural products, projects. Azure aims to install 5 GW of solar power in India by 2022.
to conduct a water footprint assessment.
Jain Irrigation has received $133 million in
IFC-led investments since 2007. Use of the
H E R O F U T U R E E N E R G I E S P R I VAT E L I M I T E D ( 2 0 1 7 )
company’s micro drip irrigation systems has
resulted in annual yield increases between Partnering with the Global Infrastructure Fund—a private equity fund
60 percent and 130 percent, and income managed by IFC’s Asset Management Company—IFC is investing
increases between $500 and $6,000 annually $125 million in equity, enabling the company to set up 1 GW of solar
for client farmers. Growth in sales has more and wind plants in the next 12 months across India. These projects
than tripled Jain Irrigation’s consolidated will contribute to the company’s target to install 2.7 GW of renewable
revenues from $315 million in 2007 to more energy capacity by 2020 while creating jobs and promoting private sector
than $1 billion in 2012. development in renewable energy.
India 3
TATA C L E A N T E C H C A P I TA L L I M I T E D ( 2 0 1 7 )
Tata Cleantech Capital Limited was established as a joint venture
between Tata Capital and IFC in 2011. Since then it has funded
more than 80 renewable energy projects with a total capacity of
3,500 MW. In July 2017, IFC signed an agreement to subscribe to
$40 million through a green bond issued by Tata Cleantech Capital
Limited. Proceeds of the bond will be used to finance wind, solar,
and other climate finance projects that meet green bond eligibility
criteria. The green bond will be structured to be compliant with the
2016 Green Bond Principles, and Tata Cleantech Capital Limited is
expected to become a signatory to the Green Bond Principles.
R E W A U LT R A M E G A S O L A R PA R K ( 2 0 1 7 ) P U N J A B N AT I O N A L B A N K H O U S I N G
FINANCE LIMITED (2016)
In April 2017, the state government of Madhya Pradesh
signed project agreements with solar power companies IFC committed to investing $75.8 million in April 2016
to begin building the 750 MW Rewa Ultra Mega Solar in green bonds issued by Punjab National Bank Housing
Park. IFC played a pivotal role advising the government Finance Limited, India’s fifth largest housing finance
of Madhya Pradesh, leading extensive negotiations with company, to help construct green residential buildings,
stakeholders and introducing internationally acceptable develop affordable housing, and create more jobs. The
principles of project finance for renewable energy bond is the first issuance designated to green buildings
contracts in India. Due to unprecedented market interest in India. The bank’s funding of residential building
and competitive bidding, for the first time solar energy projects is based on recognized green building
tariffs fell lower than thermal power rates, without standards, including the EDGE certification
viability gap funding (a record low tariff of $0.44 cents program. Projects financed through IFC’s
per kWh was offered). The 750 MW capacity project investment in this green bond are
was auctioned in three packages of 250 MW each, which expected to reduce greenhouse-
were won by Mahindra Renewables, ACME Solar, and gas emissions by 1,500 metric
Solenergie Power. Once commissioned, the plant will tons of carbon dioxide each
nearly double installed solar capacity in Madhya Pradesh, year and promote green
add 7.5 percent of India’s total installed solar capacity as building in India.
of 2016, and mobilize private sector investment of about
$500 million. In addition, the project will avoid 1 million
tons of greenhouse-gas emissions each year.
This factsheet summarizes details from the Climate Investment
Opportunities in South Asia report, which covers Bangladesh, Bhutan, 2121 Pennsylvania Ave., NW
India, the Maldives, Nepal and Sri Lanka. http://wrld.bg/PgpC30gS88e Washington, D.C. 20433, USA
www.ifc.org
India 4