New Delhi: Naina Lal Kidwai, Past President, FICCI & Chairman, Max Financial Services, suggested that all funding mechanisms should have the right environment strictures to give a fillip to green financing in the country.
Addressing the conference on ‘Galvanising Sustainable Finance for India’s Development’, organized by UNEP, FICCI and Climate Bonds Initiative, Kidwai said that in the cities there were just a handful of municipal bonds and therefore there was a need to build financing structures around municipalities. It was also important to see that funding raised by the State was directed to green financing.
The weakness, she said, was in the audit process, of determining what is green and what is not. The time was ripe to develop our own audit systems which the banks can accept while advancing loans.
Financial systems remain a key driver for green transformation of our economies. By 2030, estimates show that India will need to spend USD 2.3 trillion towards climate action. This will not be possible, however, without rapidly accelerating green finance flows to priority sectors of her economy. The convergence of economic and environmental opportunities is more than apparent and there is an increasing acknowledgment this will be the source of stable, sustainable and inclusive growth, and finance will play a central role in achieving this objective. It has the potential to mobilize additional capital from diverse sources and infuse the liquidity needed to spur economic activity that creates long-term, high-quality assets—material, human and technological.
Helena Molin Valdes, Head of the Secretariat, Climate and Clean Air Coalition, UNEP, stated that the UNEP had developed a strong political will and assumed a leadership role in reducing polluting technologies, identified barriers to green financing for the benefit of the poor and the green finance developers. It had also taken the lead in providing technical assistance for the buyers and financers of non-polluting technologies. The government, she emphasized, needed to provide an enabling environment to encourage financial institutions to devise and establish financing mechanisms in the green space.
Rathin Roy, Director, NIPFP and Member, Economic Advisory Council to the Prime Minister, said the challenge in the financing of green technologies was in the areas of city development, addressing climate disasters and agriculture. This was not being taken up and the entire conversation was dominated by the energy and infrastructure sectors.
He said it would be erroneous to regard green finance as a mere additionally; it should be seen as a substitute so that it received the priority that it deserved.
J R Bhatt, Adviser, Ministry of Environment, Forest and Climate Change, laid emphasis on the role of the private sector in raising green finance and called for greater involvement of the sector in decision-making committees of the government. He called for adaptation in mitigating climate change and re-directing financial flows towards green projects.