Unlocking Finance for Nature-based Solutions (NbS) in Indian Cities

This report by the Climate Policy Initiative, WRI India, and CEEW analyzes the financial and regulatory landscape for Nature-based Solutions (NbS) in Indian cities. It identifies significant gaps in private sector investment, which currently accounts for only 10% of global NbS finance, and provides early recommendations to improve project bankability, diversify funding sources, and strengthen the enabling environment for urban climate resilience in India.

• Indian cities face severe climate risks, with over 80% of the urban population living in hazard-prone districts. Projected losses from floods to urban infrastructure are estimated at USD 5 billion by 2030 and USD 30 billion by 2070.
• Global finance for Nature-based Solutions (NbS) is insufficient, totaling USD 220 billion annually in 2023. To meet global targets for climate change, biodiversity, and land degradation, annual flows must reach at least USD 571 billion by 2030. Currently, public funds dominate the sector at 90% (USD 197 billion), while private finance is only 10% (USD 23 billion).
• India has established several national frameworks and schemes that support NbS, including the Smart Cities Mission, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), and the Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI). Additionally, the Ministry of Environment, Forest, and Climate Change (MOEFCC) green credit program and SEBI's Green and ESG Debt securities framework aim to mobilize private sector resources.
• Private sector investment in urban NbS is hindered by a lack of risk-adjusted financial returns, weak creditworthiness of Urban Local Bodies (ULBs), limited technical capacity, and the absence of standardized methodologies and bankable project pipelines.
• The report identifies several critical success factors for scaling NbS, including the need for rigorous performance projections to build investor confidence and the aggregation of projects to a minimum of 2,000 hectares to ensure feasibility in urban areas where land availability is limited.
• To unlock finance, the report recommends diversifying funding sources beyond public funds to include loans, equity, grants, and crowdfunding. It suggests using 'ring-fencing' to segregate project funds from broader financial risks and leveraging the India Value Capture Financing Framework to connect water management benefits to land value taxes or property tax allocations.

APA

Puri, P., Pal, U., Maliwar, S., Kumar, A., John, N., Wadhawan, S., Mishra, R., & Bajpai, A. (2026). Unlocking Finance for Nature-based Solutions (NbS) in Indian Cities. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2026/02/Unlocking-Finance-for-Nature-based-Solutions-NbS-in-Indian-Cities_Overview_Web-Ver.pdf

Chicago

Puri, Parag, Uma Pal, Shruti Maliwar, Aarathi Kumar, Nikhil John, Shreya Wadhawan, Ritwika Mishra, and Aryan Bajpai. Unlocking Finance for Nature-based Solutions (NbS) in Indian Cities. Climate Policy Initiative, 2026. https://www.climatepolicyinitiative.org/wp-content/uploads/2026/02/Unlocking-Finance-for-Nature-based-Solutions-NbS-in-Indian-Cities_Overview_Web-Ver.pdf.

Wikipedia

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BibTeX

@techreport{puri2026unlocking, author = {Puri, Parag and Pal, Uma and Maliwar, Shruti and Kumar, Aarathi and John, Nikhil and Wadhawan, Shreya and Mishra, Ritwika and Bajpai, Aryan}, title = {{Unlocking Finance for Nature-based Solutions (NbS) in Indian Cities}}, institution = {Climate Policy Initiative}, year = {2026}, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2026/02/Unlocking-Finance-for-Nature-based-Solutions-NbS-in-Indian-Cities_Overview_Web-Ver.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }