Green Finance in India Reaches $82 Billion, but Money Still Flows Mostly to Established Sectors
A new report, The Landscape of Green Finance in India (fourth edition), was released by Climate Policy Initiative (CPI), a global climate finance research organisation. It tracks the money actually spent on green projects in 2022-23 and 2023-24.
Tracked finance for mitigation (cutting greenhouse gas emissions through renewable energy, energy efficiency, clean transport and electric vehicles) rose from $50 billion in 2021-22 to $81.9 billion in 2023-24.
Clean energy took more than half of this, about $41.4 billion. Energy efficiency took 31% (energy-efficient appliances were the biggest item) and clean transportation took 18%.
Green finance in India comes overwhelmingly from domestic and private sources (about 80% of tracked green finance in 2023-24). Private money made up 68% of domestic mitigation finance, more than public money.
The report found that money stays concentrated in established sectors and technologies (like solar and wind). It called for guidance, sector roadmaps and an evolving climate finance taxonomy to push money into newer areas.
An RBI official suggested a knowledge hub so lenders can better judge the risks of lending to new, less proven green technologies.
Green Finance and India's Climate Finance Taxonomy
Green finance means money (loans, investments, bonds, grants) that goes into activities that are good for the environment, such as solar and wind power, electric buses, energy-saving buildings or protecting farms from drought. Climate finance is the part of green finance that is aimed at climate change. To decide which activities truly count as "green", countries create a taxonomy: an official list with clear rules. India released a draft Climate Finance Taxonomy in May 2025.
The Climate Policy Initiative report measures India's green finance and finds it has grown to about $82 billion for mitigation, but stays focused on solar, wind and efficient appliances. Its call for an evolving climate finance taxonomy and sector roadmaps links directly to the draft taxonomy India released in 2025, which aims to guide money towards newer and harder sectors.
Sovereign Green Bonds (SGrBs)
A Sovereign Green Bond (SGrB) is a bond sold by the Government of India in which the money raised can be used only for green projects, such as solar power, electric trains or metro rail. "Sovereign" means the issuer is the national government itself. Investors get the same safety as any other government bond, and the government promises to report where the money was spent.
Sovereign green bonds are one of the main public tools behind India's tracked green finance. The report's finding that money stays in established sectors is visible in SGrB spending too: most of it has gone to railway electrification, metro rail and renewable energy, all proven areas.
Adaptation Finance Under the UNFCCC and Paris Agreement
Adaptation finance is money spent to help people, farms, cities and nature cope with the effects of climate change that are already happening, such as heat waves, floods and droughts. It pays for things like heat-tolerant seeds, better irrigation, early warning systems and stronger embankments. Under the UN climate treaties, developed countries are expected to help developing countries pay for adaptation, but adaptation has always received much less money than mitigation.
The report's finding that money stays in "established sectors" also means adaptation and newer technologies remain under-funded. Most of the $81.9 billion tracked in 2023-24 went to mitigation activities like clean energy, efficiency and transport.
- Report: The Landscape of Green Finance in India (4th edition), by Climate Policy Initiative; covers FY 2022-23 and 2023-24; launched 28 October 2026
- Tracked mitigation finance: $50 billion (2021-22) → $81.9 billion (2023-24)
- Clean energy: $41.4 billion (more than half of mitigation finance)
- Energy efficiency: 31%; clean transportation: 18% of mitigation finance
- Domestic and private sources: about 80% of tracked green finance (2023-24)
- Private share of domestic mitigation finance: 68% (2023-24)
- Draft Climate Finance Taxonomy: May 2025 (DEA, Ministry of Finance)
- Sovereign Green Bonds framework: 9 November 2022; first issue January 2023
- RBI Green Deposits framework effective: 1 June 2023
- India net zero target: 2070