Green Financing Critical to Decarbonizing the Indian Transport Sector

NITI Aayog and World Resources Institute (WRI), India, with the support of GIZ India, conducted a virtual consultation workshop on ‘Financing for Decarbonization of Transport’ as part of the NDC-Transport Initiative for Asia (NDC-TIA) project.

The Government of India is actively working towards the decarbonization of transport, with a major focus on the adoption of sustainable mobility.

The aim of the workshop is to identify actionable strategies and bring together financing institutions and transport organizations to collectively work towards furthering innovative financing policies for the decarbonization of transport.

The workshop was attended by dignitaries from various ministries, NDC-TIA project partners, representatives of Indian banks, international financial institutions and private sector companies, and stakeholders and experts from the transport and financing sectors.

NITI Aayog CEO Amitabh Kant delivered the keynote address while Dr Stephen Koch, Minister and Head of the Department for Economic and Global Affairs, Germany, gave a special address.

In his keynote address, NITI Aayog CEO Amitabh Kant said, ‘We need more such financial instruments to provide a further impetus to clean mobility in India. This is why we need to bring states, domestic and international financial institutions, manufacturers and operators on the same page. We must come up with financing mechanisms that are widely applicable, acceptable and, most importantly, sustainable. We must foster shared mobility by leveraging private sector investments and unlocking financing for e-buses, which form the core of public transportation in our cities. Our overarching aim should be to balance the needs and aspirations of our citizens, improve liveability and productivity by improving connectivity, bring down the cost of logistics and accelerate clean mobility while taking an approach which is climate-centric and sustainable—not just from an environment point of view, but also from a financial perspective. Green financing will enable low interest cost financing of electric vehicles.’

Dr Stephen Koch said, ‘India requires a robust roadmap for the electrification of transport. Financing plays a crucial role here. Mobilization of capital is possible through multi-stakeholder collaborations. The NDC-TIA initiative brings together a wide spectrum of participants to facilitate peer-to-peer learning and information exchange on various themes, including “Financing the Decarbonization of Transport”.’

WRI India CEO Dr OP Agrawal said, ‘Transport, the third-most greenhouse-gas-emitting sector in India, accounts for 14% of our energy-related CO₂ emissions. It is also the most rapidly growing sector in the country. Therefore, moving towards a low carbon future would necessarily include accelerated decarbonizing of the transport sector.’

Amit Bhatt, Executive Director (Integrated Transport), WRI India, added, ‘The lack of availability of financing is one of the biggest impediments towards the decarbonization of the transport sector. Strategic investments and innovative financial solutions can kickstart an accelerated transition to 100% zero-emission motor vehicles, which is an essential takeaway from the COP26 declaration.’

The NDC-TIA is a joint programme of seven organizations that engages India, China and Vietnam in promoting a comprehensive approach to decarbonizing transport in their respective countries. The project is part of the International Climate Initiative (IKI). The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports the initiative on the basis of a decision adopted by the German Bundestag.

NITI Aayog is the implementing partner for the India component of the project.