PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA

The document analyzes India's power sector financing between 2013 and 2019, noting that while utility-scale renewables dominate tracked commitments, continued investment in coal-fired power remains a significant barrier to Paris Agreement alignment. It highlights the risk of stranded assets in the thermal sector and recommends a shift toward green bonds, improved transmission infrastructure, and the accelerated decommissioning of old coal plants to meet 2030 climate targets.

• India is expected to meet its original Nationally Determined Contributions (NDCs) before 2030, having already reached a 38 percent share of installed capacity from renewable sources in 2020-21.
• Despite renewable growth, coal remains the dominant source of electricity generation, accounting for 74 percent of the mix, with continued financing for coal-fired plants creating a misalignment with the Paris Agreement's <1.8°C trajectory.
• Tracked power sector finance commitments averaged USD 13.9 billion annually from 2013 to 2019, with utility-scale renewable energy projects comprising the largest share at 74 percent.
• Domestic finance is the primary driver of India's energy transition, representing an average of 74 percent of all tracked finance between 2013 and 2019, with corporates alone accounting for 59 percent.
• The Indian banking sector faces significant financial risk from the thermal sector, with estimated non-performing or stranded assets between USD 40 billion and USD 60 billion.
• Investment in coal-fired power persists despite stranded asset risks; in 2019, approximately 16 percent of tracked power sector commitments (USD 2.8 billion) funded coal-fired plant development.
• Accelerating the decommissioning of 35 GW of old coal capacity could generate annual savings of USD 1.03 billion over five years, with decommissioning costs estimated at USD 4.5 billion.
• Green bonds have emerged as a scalable tool for renewable energy, with India raising over USD 14.4 billion through such issuances since 2016.
• There is a significant funding gap in transmission and distribution infrastructure, with an estimated annual requirement of USD 35 billion between 2021 and 2030, while tracked investment in 2019 was only USD 17.5 billion.

APA

Meattle, C., & Jain, S. (2022). PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/03/Paris-Alignment-of-Power-Sector-Finance-Flows-in-India.pdf

Chicago

Meattle, Chavi, and Shreyans Jain. PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA. Climate Policy Initiative, 2022. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/03/Paris-Alignment-of-Power-Sector-Finance-Flows-in-India.pdf.

Wikipedia

{{cite report |last1=Meattle |first1=Chavi |last2=Jain |first2=Shreyans |title=PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA |publisher=Climate Policy Initiative |date=March 2022 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2022/03/Paris-Alignment-of-Power-Sector-Finance-Flows-in-India.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{meattle2022paris, author = {Meattle, Chavi and Jain, Shreyans}, title = {{PARIS ALIGNMENT OF POWER SECTOR FINANCE FLOWS IN INDIA}}, institution = {Climate Policy Initiative}, year = {2022}, month = mar, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2022/03/Paris-Alignment-of-Power-Sector-Finance-Flows-in-India.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }