Just Transition Financing Framework

The report introduces the Just Transition Financing Framework (JTFF), a strategic model to manage the shift to a net-zero economy in fossil-fuel-reliant regions of India. Focusing on Jharkhand, the framework aims to prevent socioeconomic disruption by coordinating policy support, capacity building, project preparation, and capital mobilization. It outlines a governance structure involving a state-level Secretariat and a Project Management Unit (PMU) to channel diverse funding sources—including grants, concessional loans, and private equity—into targeted transition assistance for workers, communities, and industries.

• India has achieved a significant milestone in its energy transition, with non-fossil-fuel sources now accounting for 50% (243 GW) of the total installed power capacity of 500 GW, reaching this target five years ahead of the 2030 goal.
• Certain Indian states are highly vulnerable to the energy transition due to their economic reliance on solid fossil fuels; Jharkhand, Odisha, and Chhattisgarh together hold approximately 70% of national reserves, with Jharkhand accounting for about 24% as of FY 2024.
• The transition poses a significant fiscal risk to Jharkhand, as solid fossil fuels contributed 16% of the state's own revenue in FY21-22, and 17% of its revenue in FY22-23 is considered at risk.
• The JTFF is structured around four primary objectives: enabling informed decision-making for policy and regulation, supporting institutional and workforce capacity development, facilitating the preparation of bankable projects through technical assistance, and mobilizing private capital while optimizing public funds.
• The framework identifies a diverse range of financial sources and mechanisms tailored to different risk-return profiles, including grants and concessional loans from MDBs and philanthropies for social returns, and commercial debt or equity from PE/VC firms and private banks for market-rate returns.
• The proposed operational architecture for the JTFF involves a state government department overseeing a Secretariat, which in turn manages a Project Management Unit (PMU) responsible for executing activities and coordinating with technical partners.
• To ensure accountability and investor confidence, the JTFF requires a robust monitoring, reporting, and verification (MRV) system to track environmental indicators (emissions), social metrics (livelihood security), and economic parameters (job diversification).

APA

Habib, M. T., & Kumar, K. S. (2025). Just Transition Financing Framework. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/12/Just-Transition-Financing-Framework.pdf

Chicago

Habib, Md. Tariq, and Krishna S. Kumar. Just Transition Financing Framework. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/12/Just-Transition-Financing-Framework.pdf.

Wikipedia

{{cite report |last1=Habib |first1=Md. Tariq |last2=Kumar |first2=Krishna S. |title=Just Transition Financing Framework |publisher=Climate Policy Initiative |date=December 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/12/Just-Transition-Financing-Framework.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{habib2025just, author = {Habib, Md. Tariq and Kumar, Krishna S.}, title = {{Just Transition Financing Framework}}, institution = {Climate Policy Initiative}, year = {2025}, month = dec, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/12/Just-Transition-Financing-Framework.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }