India’s Green Finance Plan | 15 Sep 2025
India is turning to Contracts for Difference (CfD) as a central mechanism to mobilize nearly USD 1 trillion in green finance for its 500 GW renewable energy target by 2030.
- CfD is a financial agreement between renewable energy producers and the government to stabilize revenues. If market prices fall below an agreed strike price, the government pays the producer the difference and if prices rise above it, the producer returns the surplus.
- CfDs reduce risk and are widely used in Europe for renewable projects.
- Green finance encompasses financial products and services designed to promote environmental sustainability. To meet its Paris Agreement targets, India needs USD 2.5 trillion by 2030.
- India needs USD 10 trillion by 2070 for its net zero goal, focusing on green finance as essential for development.
- Green Financing Initiatives in India: India finances renewable energy through the National Clean Energy and Environment Fund (NCEEF) funded by coal cess.
- Indian Renewable Energy Development Agency (IREDA) concessional loans.
- Priority Sector Lending (PSL) mandated by the Reserve Bank of India.
- Green, Social, and Sustainability (GSS) Bonds.
- Carbon markets and credits, and crowdfunding platforms like Bettervest for rural projects.
|
Read more: National Green Financing Institution |