This renewable energy boom necessitates climate financing expansion

• India’s clean energy transition is accelerating, with 24.5 GW of solar energy capacity added in 2024, making it the third largest globally.

• Recognized by the UN Secretary-General’s 2025 Climate Report, India, along with Brazil and China, is a leader in solar and wind energy.

• The renewable energy sector employed over a million people in 2023 and contributed 5% to GDP growth, with off-grid solar employing over 80,000 individuals in 2021.

• Despite this momentum, a significant financial gap threatens the sustainability of the transition, necessitating an estimated $1.5 to $2.5 trillion in climate finance by 2030.

• Current climate finance flows are inadequate, with cumulative aligned GSS+ debt issuance in India reaching $55.9 billion by December 2024, primarily through green bonds.

• The challenge remains to enhance access to climate finance for micro, small, and medium enterprises and local infrastructure developers.

• To bridge the finance gap, India must diversify its climate finance strategy, utilizing public finance and blended finance models to attract private capital.

• Strategies could include credit enhancement instruments and regulatory reforms to enable institutional investors to engage in climate-aligned investments.

• Policy and institutional support are vital, with potential opportunities in carbon markets and innovations in climate finance technology.

• India is urged to lead in climate finance innovation while pursuing substantial breakthroughs in clean energy financing solutions.

Climate financing for renewables is important topic for Civil service exam (WBCS).

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