Why climate tech funding is just a trickle in India
Earlier this month, speaking at the World Leaders Summit In Glasgow, PM Narendra Modi asked the rich nations to pledge US$1 trillion per year towards helping developing countries finance their climate change mitigation and adaptation activities.
That’s 10 times more than the previously agreed upon US$100 billion in annual contribution, which itself never materialized.
Even as India fights to get more from rich countries, it is not doing a whole lot better on the private investment front.
Even as India fights to get more from rich countries, it is not doing a whole lot better on the private investment front.
Since January 2020, just over $440 million has trickled into Indian climate and cleantech startups by way of early-stage funding.
And that's a fraction of the $40 billion global investments in space in the 18 months to August 2021.
And that's a fraction of the $40 billion global investments in space in the 18 months to August 2021.
This is the decade where the climate battle will be won or lost.
India needs tons of money in the green power sector to fulfil its stated goal of 450GW-500GW of renewables by 2030, but the cost of capital is a serious bottleneck.
India needs tons of money in the green power sector to fulfil its stated goal of 450GW-500GW of renewables by 2030, but the cost of capital is a serious bottleneck.
Many renewable company CEOs that we spoke with say that given the ample liquidity in the international financial system, money won’t be a problem.
But getting it at the right rate, at a reasonable risk, and in the required time frame is where India needs to double down.
But getting it at the right rate, at a reasonable risk, and in the required time frame is where India needs to double down.
That’s not all.
This transition will not work if the power distribution companies a.k.a discoms, continue with business as usual and with their financial health in ruins. Because the last-mile power connectivity—the wires and poles—resides with these companies.
This transition will not work if the power distribution companies a.k.a discoms, continue with business as usual and with their financial health in ruins. Because the last-mile power connectivity—the wires and poles—resides with these companies.
Since most of the power distribution companies are owned by the state governments, local politics and economic compulsions influence decisions.
The only way for India to get more climate funding is to unleash local demand. Power distribution sector reforms could unleash local demand because the global climate pool money is still a mirage.
Deepening local demand for climate-friendly alternatives is the first big step in winning the climate battle, and global private capital will follow, writes @Singh10Seema in her well-argued story today:
the-ken.com/story/why-clim…
the-ken.com/story/why-clim…
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