Blended Finance for Climate Investments in India

October 4, 2023

India needs substantial amounts of climate finance by 2050 to achieve its ambitious sustainability goals. An estimated US$10.1 trillion will be required to get to net-zero by 2070. Public investment alone will be insufficient to tackle India’s adaptation and mitigation targets, so financing that can bring in private sector investment is vital to scaling climate solutions with urgency.

A new IFC report on Blended Finance for Climate Investments in India maintains that catalytic capital will be critical for investments in private sector climate projects in India.

Climate finance needs to increase by 590 percent to meet internationally agreed climate objectives by 2030, according to the Climate Policy Initiative (2021). By de-risking projects that the private sector would otherwise deem too risky, blended finance instruments like concessional loans, guarantees, subordinated debt and performance-based incentives, in combination with other tools such as advisory and technical assistance, can help create opportunities that would not otherwise exist. Blended finance investments have grown significantly in the past decade globally representing an aggregated financing of over US$160 billion in 2021, with annual capital flows averaging approximately US$9 billion since 2015 (World Bank Data).

The blended finance market in India is growing and at a critical inflection point. There is increasing recognition of the importance of collaboration between public, private, and philanthropic capital to unlock development gains. The report emphasizes the urgent need for blended finance for climate solutions in agriculture, land and water management, power, transport, infrastructure, health, industry, and circularity—in alignment with India’s net-zero ambitions as well as the government’s short, medium, and long-term development priorities.

With positive regulatory changes for tax exemptions related to blended finance already underway, the report highlights with IFC’s existing blended finance investment case studies the role IFC can play in increasing blended finance climate investments in India with the support of concessional funds from contributors.

Leveraging 20 years’ experience of blended finance in emerging economies around the world, IFC has recently deployed blended finance to address key development challenges in India including climate and food security, supporting projects in agritech, energy infrastructure and affordable, green housing supported by blended finance from partners like Canada, the United Kingdom, Finland.

IFC remains committed to mobilizing new and additional financing in support of India’s climate targets, and to tackle the global climate crisis. We look forward to harnessing the potential of blended finance in India in collaboration with the government, donor partners, as well as other development finance institutions.

For more information on blended finance at IFC please visit

For more information on blended finance in India, please reach out to Roshika Singh, Senior Country Officer or Veenu Singh, Country Analyst, at