ICRIER Report Bats For Establishing Green State Investment Banks For Clean Tech Financing 

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A latest Policy Paper released by the International Council for Research on International Economic Relations (ICRIER), a think-tank on Clean Energy Finance, batted for establishing a green state investment bank (SIB) to finance new clean energy technologies. The think tank released the paper ahead of the G-20 meeting in India to attract its stakeholders on the issue of clean energy financing.

The policy paper said that green SIBs could play multiple roles in taking the energy finance agenda further. For example, the report claimed these banks in many countries helped boost investments in renewable energy technologies.  

“In Germany and UK, these banks have facilitated investments for renewable energy technologies in different forms that were perceived as risky by the market and have also provided loan guarantees to de-risk projects. Further, these banks can help to educate project developers and investors about technology risk assessments. Due to their specific green capabilities, SIB investments have the ability to serve as signals to other market stakeholders of the quality of technology and of the safety of investments”

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The report said it also helps catalyze the private sector interest, build confidence, and reduce the perception of risk for private money. The report also discussed matching the required financial resources with the demand, accounting for varying capital costs. It also batted for pushing technological innovation at the national level and greater international responsibility. 

Regarding India’s clean energy development and existing financial strategies, the report said that India is yet to implement a carbon tax like other countries like Argentina, South Korea, the UK, the US, and others. It also said that the country also had yet to disclose its ESG information. But it pointed out that the country has Energy Trade Systems and steps were also taken for Green Taxonomy. 

The report also said there was a need for public financing for developing nations to boost the growth of new clean energy technologies. “It has been observed that private investments in the broader climate technology are often set to fall, with the fear that the previous bust of investments in clean technology may repeat. While a significant scope of expansion of private investments exists, its risk-averse nature and the lack of initial support hinder the tapping of the opportunity,” the report said. 

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The ICRIER report said there are four stages in building up a market-ready clean energy technology–Research & Development (R&D), Demonstration and Deployment, Initial and Limited Diffusion, and Commercialization. 

“Each of these stages requires proper policy support and finance to leverage the process and ensure the progress of the technology. For instance, for the wider diffusion of the technology, it may be important to use appropriate carbon pricing and subsidies to take care of market failures,” the report said.