In a move toward combating climate change, the UK government's development finance institution, British International Investment (BII), has set its sights on a $1 billion investment in Indian clean energy projects by 2026. This ambitious initiative is fuelled by India's burgeoning renewable energy capacity, with BII's CEO, Nick O'Donohoe, emphasising the pivotal role that India will play in achieving the 2030 climate goals agreed upon by both India and the UK.
Reuters quoted O'Donohoe as saying, "We are evaluating exciting businesses in sectors such as bio-fuels, circular economy ... as part of the vision for the 2030 roadmap agreed between India and the UK."
This substantial commitment follows BII's remarkable investment of over $300 million in climate finance within India last year. These investments spanned sectors ranging from renewable energy and electric mobility to sustainable agriculture. As of now, BII's portfolio in India is valued at an impressive $2.2 billion, spread across more than 290 businesses. It's worth noting that in 2022, BII pledged to invest up to $250 million in Mahindra and Mahindra Ltd's new electric vehicle unit, underlining its faith in the Indian market.
According to Reuters, O'Donohoe expressed his enthusiasm for investing in India, speaking of buoyant stock markets and stable political environment as significant factors in BII's decision-making. While he didn't delve into specific returns on Indian investments, he did affirm that India was experiencing a "good phase" compared to some African nations where challenges like high debt, inflation, and weakening currencies have impacted returns.
BII aims to support emerging entrepreneurs and companies struggling to secure funding for their emission-cutting projects.
According to a report by The Economic Times, O'Donohoe highlighted India’s and UK’s focus on green hydrogen, recognising its role in the transition to a net-zero future. "It'sclear that hydrogen will be a critical part of the (transition to) net zero... That's why development finance has an important role to play," The Economic Times quoted him as saying.
The report said that, in addition to green hydrogen, BII is exploring opportunities in sectors such as biofuels, the circular economy, micro-enterprises lending, agriculture, and agritech.
Nick O'Donohoe also weighed in on the reform of multilateral development banks (MDBs), a crucial topic endorsed by the Delhi Declaration of the G20 leaders. He anticipates progress in this area at the upcoming World Bank meeting in Marrakesh. O'Donohoe emphasised the potential for MDBs to leverage their balance sheets more aggressively for climate finance, a crucial step in meeting the financing needs outlined in the Delhi Declaration.