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Industry body PHDCCI has recommended setting up a dedicated Green Bank or Climate Finance Facility to accelerate private investment in renewable energy, electric vehicles, energy efficiency, and other green technologies. Shared ahead of the Union Budget, the proposal aims to address funding gaps by offering blended finance, credit support, and risk-sharing for climate-focused projects. The chamber said such a facility could mobilise long-term capital through green bonds and attract global investors. Industry leaders also called for stronger disclosure norms to build confidence in sustainable finance. The recommendations come as India steps up clean energy and climate investments, with green finance seen as key to supporting low-carbon infrastructure, housing, and climate-resilient urban development.
Industry body PHD Chamber of Commerce and Industry (PHDCCI) has recommended the creation of a dedicated Green Bank or Climate Finance Facility to accelerate private investment in green technologies, including renewable energy, energy efficiency solutions, and electric vehicles. The proposal was shared as part of its pre-Budget recommendations ahead of the Union Budget. Advertisement
The suggestion emerged during a pre-Budget interactive session organised by PHDCCI with representatives from the banking, financial services and insurance (BFSI) sector. Participants highlighted the growing need for structured financial support to scale up climate-focused projects, especially as India increases investments in clean energy, sustainable infrastructure, and low-carbon technologies.
According to the industry body, a dedicated Green Bank could play a catalytic role by de-risking green projects and attracting long-term private capital. Such an institution could offer blended finance solutions, provide credit enhancements, and support early-stage green technologies that often struggle to secure traditional bank funding.
Participants at the session also emphasised the importance of budgetary support and risk-sharing mechanisms to strengthen green lending. They called for clear and robust disclosure frameworks to ensure transparency, credibility, and accountability in climate-related financing. Strong disclosure norms, they said, would help build investor confidence and support the growth of sustainable finance markets.
PHDCCI further suggested that once established, the Green Bank should be permitted to raise funds through green bonds and pooled financial instruments. This would allow the institution to mobilise large-scale capital from domestic and global investors seeking exposure to climate-aligned assets. Green bond issuances could also help lower the cost of capital for clean energy and sustainability-linked projects.
Beyond climate finance, the industry body outlined several broader expectations from the upcoming Union Budget. These include improved access to credit for micro, small and medium enterprises at lower interest rates, additional support for export-oriented sectors facing global demand pressures, and increased liquidity infusion into the financial system.
PHDCCI Chairman Gurmeet Chadha said that while policy rate cuts have been implemented, their benefits have not fully reached businesses and consumers. He noted that credit transmission remains uneven, particularly for MSMEs and smaller borrowers, and called for measures to ensure that lower borrowing costs translate into actual relief on the ground.
The BFSI sector representatives also flagged the need for targeted interventions to strengthen lending to priority sectors such as infrastructure, housing, renewable energy, and manufacturing. These sectors play a key role in driving economic growth, job creation, and long-term investment.
The Union Budget is expected to be tabled on February 1, with the Budget session of Parliament likely to begin on January 28. Industry groups across sectors have been engaging with policymakers to highlight key challenges and suggest reforms ahead of the annual fiscal exercise.
With India committed to expanding renewable energy capacity, improving energy efficiency, and meeting its climate targets, the proposal for a Green Bank reflects growing demand for dedicated financial institutions that can support the transition to a low-carbon economy. If implemented, such a facility could also support green buildings, sustainable urban infrastructure, and climate-resilient real estate developments by improving access to long-term, affordable capital.
Source: PTI
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