Charting a Path for Finance Policy in Clean Infrastructure

This working paper analyzes infrastructure investment models in India and Brazil, specifically focusing on wind energy projects, to evaluate how centralized versus decentralized financial systems influence the cost and effectiveness of clean infrastructure finance.

• Despite having different structural models—Brazil using a centralized national development bank (BNDES) and India using a decentralized mix of public and private institutions—both countries saw public financing dominate their infrastructure projects. Both nations exhibited similar levels of leverage and a lack of financial innovation, failing to adopt risk assessment, insurance, and construction finance models common in developed economies.
• The differences in infrastructure finance between Brazil and India are driven more by policy environments than by the financing models themselves. Brazil's national development bank operates alongside a cohesive national regulatory, auction, and pricing system. Conversely, India experiences wide variations in regulation, targets, and financial stability across different states, which can overwhelm national-level policy.
• Brazil's centralized development banking model successfully fostered greater scale than India's model, aiding in the achievement of financial objectives and government policy targets. However, it failed to realize certain potential benefits such as enhanced market liquidity and risk transfer.
• Both financial models present distinct governance and efficiency risks. Centralized models may lead to financial inefficiency, higher infrastructure costs, and governance concerns despite better supporting national policy. Decentralized models reduce government interference but can still result in suboptimal investments due to relationship-investment practices, poor financial health of power off-takers, or centralized decision-making among a small group of actors.

APA

Climate Policy Initiative (2015). Charting a Path for Finance Policy in Clean Infrastructure. https://www.climatepolicyinitiative.org/publication/charting-a-path-for-finance-policy-in-clean-infrastructure/

Chicago

Climate Policy Initiative. Charting a Path for Finance Policy in Clean Infrastructure. 2015. https://www.climatepolicyinitiative.org/publication/charting-a-path-for-finance-policy-in-clean-infrastructure/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Charting a Path for Finance Policy in Clean Infrastructure |date=8 December 2015 |url=https://www.climatepolicyinitiative.org/publication/charting-a-path-for-finance-policy-in-clean-infrastructure/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2015charting, author = {{Climate Policy Initiative}}, title = {{Charting a Path for Finance Policy in Clean Infrastructure}}, institution = {Climate Policy Initiative}, year = {2015}, month = dec, url = {https://www.climatepolicyinitiative.org/publication/charting-a-path-for-finance-policy-in-clean-infrastructure/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }