Mobilizing non-public finance for local weather motion has grow to be a central concern in each world and nationwide finance agendas, notably as public funding alone is inadequate to satisfy the rising funding wants for mitigation and adaptation. Blended finance—outlined because the strategic use of public or concessional capital to draw non-public funding—has emerged as a promising instrument to bridge this financing hole. Nevertheless, regardless of its potential, its utility stays restricted in rising markets like India resulting from structural limitations, regulatory constraints, and a scarcity of institutional coordination.
This paper examines world and Indian local weather finance developments, highlighting persistent shortfalls in non-public sector participation and skewed investments towards mitigation over adaptation. With India’s clear power funding wants projected to rise to over USD 250 billion yearly by 2030, present flows fall drastically quick. Though India has initiated a number of coverage reforms to advertise local weather investments, the blended finance ecosystem stays nascent and faces challenges, together with authorized ambiguity, restricted credit score enhancement mechanisms, and underdeveloped risk-sharing constructions.
The paper argues that past monetary structuring, enabling regulatory and coverage frameworks—corresponding to inexperienced taxonomies, streamlined tax regimes, and public ensures—are vital to unlocking higher non-public capital. A mixed method integrating monetary innovation with supportive coverage devices is crucial to scale blended finance and align with nationwide and world local weather objectives.
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