India targets $3.1 trillion climate investment opportunities by 2030: IFC report

New Delhi: India’s ambitious plans to meet its climate targets under the Paris Agreement represent about $3.1 trillion worth of investment opportunities by 2030 in sectors including renewable energy, green buildings, transport infrastructure, electric vehicles, and climate-smart agriculture, says a new IFC report on Thursday.

The report, which examined the climate-investment opportunities in  Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka, found that these countries together represent 7.38 percent of global carbon dioxide emissions. 

It also identified $172 billion of climate-smart investment opportunities in Bangladesh, $42 billion in Bhutan, $2 billion in the Maldives, $46 billion in Nepal, and $18 billion in Sri Lanka. 

“The only way that the South Asian countries can take advantage of these climate investment opportunities is with a strong and engaged private sector,” said IFC CEO Philippe Le Houérou. “We also need to have a comprehensive approach to creating markets for climate business in key sectors. That means putting in place necessary policy frameworks, promoting competition, and building capacity and skills to open new markets.”

With a population of 1.3 billion, India is the world’s third-largest economy according to purchasing power parity, and with a young, large, and growing labour force, the country is a significant market for the private sector. 

Talking about the business opportunities, the report said, "India’s government is pursuing an agenda of “development without destruction”, aiming to reduce the emissions intensity of its GDP by up to 35 percent from 2005 levels by 2030. As India works to deliver universal electricity access and address rapid urbanization, this creates business opportunities. The country’s private sector is responding quickly to the opportunities created by its stated climate target under the Paris agreement and domestic policy goals and is taking every chance to make climate-smart investments marketable."

The estimated trillion-dollar opportunities in India by 2030 include the following sectors:

-$448 billion in renewable energy, created by the large-scale, strong government commitment to install 175 GW of capacity by 2022, and India’s target that aims for 40 percent of installed capacity to come from renewable sources by 2030.

-$1.4 trillion in green buildings, arising from rapid urbanization, policy incentives for green construction, and the fact that 70 percent of buildings needed by 2030 are yet to be built.

-$250 billion in transport infrastructure to help achieve a modal shift from private to public transport, and $667 billion in electric vehicles to meet the government’s goal of electrifying all new vehicle sales by 2030.

-$11 billion in municipal solid waste management to bridge the gap between the significant amount of waste produced and the availability of appropriate infrastructure for solid waste management to 2030.

-$128 billion in climate-smart urban water to collect, treat and manage urban wastewater, and help alleviate urban India’s water stress.

-$194 billion climate-smart agriculture to boost agricultural productivity, enhance resource efficiency and resilience, and modernize India’s agricultural sector.

IFC is strongly committed to supporting the private sector in the South Asia region. Since 2005, IFC has invested $2.6 billion of its own funds in long-term financing for climate-smart projects in South Asia and additionally mobilized almost $1 billion from other investors. The report is a follow-up to the Creating Markets in Climate Business report published earlier this month.