FICCI – UNEP Inquiry released an Interim Report on “Designing a Sustainable Financial System for India”. The report proposes key recommendations on designing the Indian financial system in a way that will channel finance and unlock private capital towards clean energy financing and other sustainable development priorities.
This report becomes significant in light of the upcoming Renewable Energy Meet and Expo (RE-Invest) starting on February 15, 2015 in New Delhi, where financing and investment friendly framework will be major planks of discussion. In fact, this report has been done at the behest of Minister Piyush Goyal who urged FICCI and UNEP to present recommendations on financing for clean energy before RE-Invest.
The report highlights some of the key recommendations that developing a sustainability oriented market framework would require in terms of investing in sustainable infrastructure and increase the long term viability of infrastructure projects, incentivising public sector investments and capacity building in the SME sector. Incentives and initiatives could lead to an increase in domestic equity investment through equity tax credits, production tax credits and development of energy service companies.
Market innovation is required with respect to credit enhancement as well as developing new thematic markets such as the Green Bonds market and Yield Companies (YieldCos). All of this will require new skills and capabilities across the financial system to grow an army of financial intermediaries who can provide the best advice and products to their clients, both rich and poor, to navigate the sustainable finance landscape.
UNEP India Inquiry in partnership with FICCI has proposed feasible options to meet this challenge in the larger context for transformation of the Indian financial regulatory landscape, regulations and incentives that will channel finance into sustainable development priorities, and innovative markets for clean energy financing. Members of this advisory committee include organisations like SIDBI, Shakti Foundation, Kiran Energy, IL& FS, CSE, TERI, CPR, DA, SunEdison, IndusInd, EMC, ORF, IFMR, IBA, IDFC, Yes Bank, HDFC, WWF, IFC, HSBC and GIZ, NIPFP and UNEP.