Green funds will help make the benefits of clean energy a reality for India
A green fund's mission is to promote the growth of a vibrant clean energy economy. As green funds typically reinvest their income, effectively recycling public funds, they can create a bigger market impact than government subsidies or incentives alone. Green fund investments demonstrate the viability of clean energy technologies or take some of the risk until the private sector is comfortable with the new technologies. In addition to direct lending, a true green fund offers financial products that help make commercial banks more comfortable with financing clean energy projects. Based on successful models, an Indian green fund can be developed to suit India's specific needs and market conditions. An Indian green fund could drive private investment from domestic banks as well as international sources of funding, such as the Green Climate Fund. A green fund with a mission to expand clean energy can bundle small projects together to increase scale and reduce transaction costs, making them more attractive to private lenders.