International Renewable Energy Agency Report:
A recent report called ‘Low-cost finance for energy transition,’ released by the International Renewable Energy Agency (IRENA), has recognized and praised India’s outstanding progress in expanding its renewable energy capacity.
- The report describes India’s achievements as “unprecedented”.
- India aims to achieve 175 GW (100 GW from solar, 60 GW from wind) of renewable energy capacity by 2022 and 500 GW of non-fossil fuel capacity by 2030.
- India aims to achieve net-zero greenhouse gas emissions by 2070, requiring an estimated $10 trillion of investment.
- India ranked third on the index in 2021, showcasing its commitment to renewable energy development
- India possesses the fourth-largest solar and wind power base globally, experiencing rapid growth.
- The Indian government’s comprehensive policies have effectively supported the achievement of national targets.
- IREDA (Indian Renewable Energy Development Agency) has played a crucial role in commissioning approximately 20 GW of renewable energy capacity through financing to developers.
- Green bonds attract private sector investment, reducing the cost of capital for green projects.
- Overall green bond issuance in India has reached $18.3 billion cumulatively, with a record issuance of $7 billion in 2021
- IREDA has promoted emerging technologies such as battery energy storage systems, green hydrogen electrolysers, e-mobility, and waste-to-energy through innovative financing policies.
- The Indian government’s sovereign bond issuance aims to reduce supply from non-green bonds, lowering overall bond yields.
- Local banks and insurance companies predominantly purchased the bonds, with some foreign bank involvement.
- Green bond investments qualify towards the Reserve Bank of India’s statutory liquidity ratio and are classified as infrastructure investments by insurance companies.
- Investment in sovereign green bonds is categorized as specified securities, allowing unlimited investment by foreign investors.