Industry calls for guaranteed contracts
The Indian Railways plans to attract more private investment, encouraging project-specific subsidiaries (in form of SPVs) with equity from public sector undertakings (PSUs) and the private sector.
Railway Ministry’s Executive Director Vijay Garg highlighted this at a conference on ‘Role of Sustainable Finance: Translating Climate Ambition into Investment Opportunities’ organized by FICCI on the sidelines of UNFCCC COP 25 in Madrid on 13 Dec 2019.
The conference was also told that the Indian Railways needs as much as US$600 billion investment by 2030 to fulfill the Nationally Determined Contributions (NDCs) goal of increasing the modal share in freight from 36% to 45%.
“Indian Railways estimates an investment need of $600 billion by 2030 towards the NDCs goal of increasing the modal share (in freight) to 45%,” added Alok Tewari, Principal Executive Director, Railway Board.
But industry stalwarts also expressed the need for assurances on contracts.
Guaranteed contract enforcement and honoring the Power Purchase Agreements (PPAs) are required for tapping into private investment for sustainable finance, underlined Upendra Tripathy, Director General, International Solar Alliance.
The industry call was taken further by Kolluru Krishan, Chair, FICCI Climate Change Committee. He highlighted a need to promote Socially Responsible Investing as it integrates environmental, social and governance (ESG) criteria into investment decisions.
He also mentioned that establishing a green taxonomy is crucial.
Kunal Upadhyay, Co-founder and Managing Partner at Bharat Innovation Fund (a fund affiliated to the Indian Institute of Management, Ahmedabad), took it further by emphasizing the need of creating an ecosystem for investors, especially for the start-ups.
Supporting the calls, Sean Kidney, CEO, Climate Bonds Initiative, highlighted global success stories and how India can build on those examples in terms of technology, innovation, and finance.
The Asian Development Bank’s (ADB) views were also presented on the climate finance by its Principal Climate Change Specialist Virender K. Duggal.
Duggal, from ADB’s Sustainable Development and Climate Change Department, pointed out that 75% of ADB’s operations will focus on climate finance by 2030.
He also pointed out that it is imperative to align the investment portfolio with national priorities and it could be done at the time of project conceptualization as well. fiinews.com
