India leads in financing green projects

New Delhi: India has taken the lead in providing finance to renewable energy projects by including them in ‘priority sector lending’ to accelerate the country’s transition to a low carbon economy in the fight against climate change.

Addressing a policy seminar on Climate Change Risks and Finance, RBI Governor Sanjay Malhotra said, “central banks in advanced economies have traditionally followed an asset neutral approach. Central Banks in emerging markets and developing economies, on the other hand, have adopted directed lending policies to channelise credit to certain sectors of their economies given their individual country circumstances and developmental objectives. He highlighted that India’s priority sector lending guidelines facilitate credit to be channelled to renewable energy.

“We have included finance to small renewable energy projects – solar, biomass based, windmills, micro-hydel plants and non-conventional energy based public utilities viz. street lighting systems, and remote village electrification projects as part of priority sector lending,” Malhotra said.