By Faridat Salifu
The Reserve Bank of India (RBI) Governor, Sanjay Malhotra, has expressed the urgent need for financial institutions to establish a centralized pool of bankable green projects to catalyze investment in sustainable technologies and bolster India’s efforts at combating climate change.
Malhotra highlighted the challenges in financing green projects, which often carry higher credit risks due to their reliance on innovative yet unproven technologies.
He urged financial entities to enhance their capacity and technical expertise to effectively assess these risks, thus enabling more informed investment decisions.
“The creation of a shared pool of viable climate projects will yield significant benefits across the ecosystem,” he stated, underscoring the collaborative responsibility to mitigate climate change impacts.
With over 80 percent of India’s population living in climate-vulnerable areas, the call for action is more pressing than ever, Malhotra said.
He revealed that the RBI is working on a framework that will mandate banks to disclose their strategies for managing climate risks, aiming for greater transparency and accountability within the financial sector.
Rajeshwar Rao, a deputy governor, previously noted that India requires approximately $160 billion annually to fulfill its climate commitments made during the 2021 COP26 conference.
As India targets net-zero emissions by 2070, Malhotra’s remarks signal a pivotal shift towards integrating climate considerations into financial practices, ensuring a more resilient and sustainable economic future.