India has recently positioned itself as a frontrunner in the battle for clean technology funding, reflecting a significant shift in the global landscape for green investments. Recent data from BloombergNEF indicates that in the third quarter of this year, India secured approximately $2.4 billion in clean tech deals, surpassing China's figures by a factor of more than four. This notable performance demonstrates India's emergence as the second-largest market for green technologies worldwide, trailing only the United States.
Raj Pai, the founding partner of GEF Capital Partners, highlighted that India's robust push to bolster local clean energy capacities and lessen its dependency on Chinese imports has invigorated investor interest. "The attractiveness of the climate sector for both public and private capital is very high," Pai remarked, underscoring the momentum building in India’s clean technology sector.
Government initiatives have played a crucial role in this acceleration. The Indian government has introduced various policies aimed at stimulating growth within the clean energy sector. According to the International Energy Agency (IEA), India is expected to have the fastest growth of renewable energy across major economies for the remainder of the decade.
This surge in clean technology investment has coincided with a number of public listings by renewable energy and electric vehicle entities. Companies such as Waaree Energies Ltd., which manufactures solar panels, and Ola Electric Mobility Ltd. have launched their shares to the public, enhancing the visibility of green industries. Notably, NTPC Green Energy Ltd. has recently reported an increase of over 30 per cent in its share price since its market debut last month.
Speaking to The Aluminium Circle, Abhinav Sinha, Head of Technology and Telecoms at British International Investment Plc, noted the growing popularity of climate-related investments in India, saying, "Climate is the hottest topic for venture capital right now in India." The BII has committed to investing at least $1 billion in climate-focused projects in the country by 2026, having already emerged as a significant player in the Indian market.
According to Sinha, venture capital firms are increasingly directing nearly 25 per cent of their seed-stage investments toward climate-oriented startups. However, despite the positive trends, year-to-date investments in India have totalled $3.6 billion, which still lags behind China's $5.6 billion. Notably, to meet its ambitious net-zero emissions target—20 years earlier than its current goal of 2070—India will require an estimated $12.4 trillion in investments, as projected by BloombergNEF.
The challenges faced by the Indian clean startups are considerable, with only about 25 per cent of the estimated 800 startups in the climate sector securing funding in the past decade, raising a total of $3.6 billion. In contrast, fintech companies have garnered over $19 billion during the same period. Dhanpal Jhaveri, the CEO of Eversource Capital, which closed its largest climate impact fund in 2022 and is currently investing over $125 million in energy demand services, expressed the urgency for capital, stating, "We are not even in a pond, we are in a puddle where we need an ocean of capital."
Despite these hurdles, the growing emphasis on clean technologies highlights India's potential to reshape global energy practices and drive significant changes in its economic framework. The clean technology sector's resilience and investor interest signal a promising yet challenging path ahead for sustainable initiatives within the country.
Source: Noah Wire Services