New Finance Instruments Will Help Fund India’s Green Infrastructure Targets

Two new green finance instruments launched at the end of October by the India Innovation Lab for Green Finance are intended to help India meet its green infrastructure goals.

The India Innovation Lab for Green Finance is one of four “Labs” set up by The Lab, a clean energy financing group which “identifies, develops, and accelerates a small selection of well-designed, early stage businesses and financial instruments that can unlock billions in sustainable investment” which was founded in 2014. Specifically, the India Innovation Lab for Green Finance (India Lab) is a group of investors and government representatives that accelerates green finance instruments to meet India’s green infrastructure goals.

Announced on October 27 in New Delhi, the India Lab has launched two new green financial instruments that are designed to “help catalyze millions of dollars for clean energy in India.” The launch is a partnership with the India Lab’s public and private Lab Members, which includes a long list of big names, including: the Indian Ministry of New and Renewable Energy, the Ministry of Finance, the Indian Renewable Energy Development Agency (IREDA), the Asian Development Bank, ReNew Power, Cyril Armachand Mangladas, HSBC India, KfW Bank, YES Bank, the World Bank, and the development agencies of the French, UK, and US governments, among others.

“The green finance instruments launched by the India Lab aim to tackle some of the most difficult financing challenges for clean energy and sustainable urbanization in India,” said Gireesh Shrimali, Director, Climate Policy Initiative India and India Lab Secretariat. “Our analysis shows that they’re ready for this challenge, and we look forward to seeing them in action.”

The two new finance instruments have been under the India Lab’s microscope for the last year before they were launched. They are:

• Solar Investment Trusts (SEITs): An instrument similar to a mutual fund, which can help small-scale rooftop solar developers in India raise capital at a lower cost of financing. Proposed by Cleanmax Solar, SEITs can mobilize capital worth USD 1 billion within the next five years in key Indian markets.
• Sustainable Energy Bonds (SEBs): Debt instruments that aim to drive impact investment to sustainable energy in India by offering debt exposure, sufficient returns, and standardized impact measures for impact investors. Proposed by cKers Finance, SEBs will create credible benchmarks for impact evaluation, lower transaction costs, and de-risk small-scale lending.

“Cyril Armachand Mangladas is proud to be a part of the India Lab, and we’re excited to see this new class of innovative green finance instruments take off and attract needed investment for green infrastructure in India,” said Santosh Janakiram, Partner, Cyril Armachand Mangladas.

“The Lab is a great platform to promote innovative financing  instruments for sustainable development in India,” added Hemant Bhatnagar, Senior Sector Speacialist, KfW Bank.