30 May 2026, New Delhi: The Energy and Resources Institute (TERI) today launched a forward-looking discussion paper titled, A Five Pillar Framework for Bankability: Recalibrating India’s Commercial Finance for Climate Action at India International Centre, New Delhi. The paper presents a comprehensive framework to strengthen India’s commercial finance ecosystem for climate investments by embedding climate considerations within mainstream banking and credit systems.
The discussion paper, authored by Mr Sidharth Sinha, Senior Fellow, TERI and Dr Manish Kumar Shrivastava, Associate Director, TERI draws upon stakeholder consultations with commercial banks, regulators, development finance institutions, and policy experts. The report was launched during a high-level event attended by policymakers, financial sector representatives, regulators, researchers, and industry experts.
The event featured a welcome address by Dr Vibha Dhawan, Director General, TERI; a keynote address by Ms Rajasree Ray, Economic Advisor, MoEFCC, and a contextual address by Ms Leena Nandan, Distinguished Fellow, TERI and former Secretary, MoEFCC followed by a roundtable discussion.
The paper argues that India’s climate finance challenge is not merely about mobilizing capital, but also about ensuring that climate investments become “bankable by design” within the country’s existing commercial lending architecture. With India requiring an estimated USD 2.5 trillion in climate investments through 2030, the study highlights that commercial banks will need to play a central role in financing the country’s climate transition.
The discussion paper identifies five key barriers that constrain climate finance in India: lack of fit-for-purpose lending products, absence of climate-integrated credit processes, uncertainty around revenues and cash flows, structural tenor mismatches between climate assets and bank liabilities, and the absence of scalable de-risking mechanisms.
To address these challenges, the paper proposes a five-pillar framework focused on: policy and regulatory certainty; revenues and cash flows; promoter and delivery capability; risk-sharing and de-risking; and capital-stack fitness.
In the welcome address, Dr Vibha Dhawan said, “We are witnessing an acceleration of transition in the fields of renewable energy, electric vehicles, the built environment, industrial decarbonization, sustainable agriculture, alternative fuels, and so on. The next stage and scale of technology deployment, will require the three aspects to come together: the technology development and deployment pathways; pathways to mobilize commensurate private finance, particularly commercial debt, at scale; and a consensus on a collaborative implementation plan among the various stakeholders.”
Setting the context for the discussion, Ms Leena Nandan noted, “The paper is relevant as it explores the critical arena of how to channelize finance flows for incentivizing climate investments. While offering key insights into the financing eco-system, it moves beyond the challenges and gaps by identifying an actionable framework that is innovative in design and multi-layered in its potential outcomes.”
Delivering the keynote address, Ms Rajasree Ray said, “India’s climate finance strategy should be aligned with macro-financial stability and national development priorities, with public expenditure, private investment, and international climate capital deployed in a coordinated and inclusive manner to support sustainable growth and energy transition.”
Presenting the report, Mr Sidharth Sinha highlighted that “the current financial system often fails to account for the unique characteristics of climate investments, especially the next-generation technologies such as green hydrogen and carbon capture, hence we need to reshape the concept of bankability for climate projects.” Among the key recommendations, the paper proposes recognition of climate lending within the Priority Sector Lending framework, introduction of climate-informed credit risk ratings, adoption of a two-dimensional risk-weighting system, promotion of standardized climate transition loans, and establishment of a Transition Risk Capital Platform.
The launch was followed by a roundtable discussion featuring experts from the banking sector, financial institutions, policy bodies, and the climate finance ecosystem, focusing on pathways to operationalize climate-aligned commercial finance in India.
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