NITI Aayog on Green Financing

February 23, 2022

According to NITI Aayog, there is a need for more financial instruments to provide a boost to clean mobility in India, particularly shared mobility, while keeping its focus on finance methods that are widely acceptable, applicable, and sustainable.

Overview:

NITI Aayog has insisted on taking a sustainable and climate-centric approach both from an environmental standpoint and also from a financial standpoint.
In order to boost financing in the sector of clean mobility, international and domestic financial institutions, states, operators, and manufacturers should be brought on the same page.
The aim should be to bring about a balance on the needs of the citizens of India so as to improve productivity and liveability. This can be done by bringing down logistics costs and accelerating clean mobility through a sustainable and climate-centric approach.
A ‘Financing for Decarbonization of Transport’ workshop under the NDC-Transport Initiative for Asia (NDC-TIA) project was organized. This workshop was organized by NITI Aayog in association with the World Resources Institute (WRI), India, and GIZ India.

How will Green Financing help?

NITI Aayog stated that green financing will enable low-interest financing of electric vehicles. Also, India requires a proper plan for the purpose of electrification of transport and finance will play an important role in it.

What is Green Financing?

When there is an increase in the flow of finance from private, public, and not from profit sectors such as micro-finance, bank, and other financial sectors towards sustainable development then it is known as green financing. Any financial activity that has been created with the aim of ensuring better environmental outcomes then it is green financing.

Hurdles faced

One of the most significant hurdles to the decarbonization of the transportation sector is a lack of financing. Strategic investments and new financing solutions are a must to jumpstart this sector so India can achieve the COP 26 targets.

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