India Sets Pace in Clean Tech Investment and Solar Development Over China

India has emerged as a leader in clean technology funding in the past few months as attempts have been made to develop local green manufacturing to attract investors. Sixty-four transactions valued at around $2.4bn were completed in the third quarter, four times the volume in China and second only to the US.

The acceleration of solar development is due largely to New Delhi’s drive to develop indigenous sources of clean energy to decrease dependence on China and the opportunity to become a net exporter of the technologies Pai, the founding partner of GEF Capital Partners, a climate-focused private equity fund.

Waaree Energies Ltd, a manufacturer of solar panels, and Ola Electric Mobility Ltd are among more than a dozen new renewables and electric vehicle firms listed this year clean power firm NTPC Green Energy Ltd, started trading in the last month and its shares rose by 30%.

While India was nearly on par with China in terms of green technology funding in the third quarter, $3.6 billion this year is far off from China’s $5.6 billion, BNEF data reveals. Investment of up to $12.4tn would be needed, according to BNEF, to speed up India’s transition to net zero in order to hit the target 20 years earlier than the current 2070 aim.

While there are roughly 800 climate-focussed startups in India, only a quarter of them have managed to raise capital over the last decade, and the total raised sum of $3.6 Bn is significantly lower than the $19.5 Bn plus raised by fintech during the same period, according to IIMA Ventures and Mitsubishi UFJ Financial Group Inc in a September report.

However, the climate technology market is expected to grow quickly as firms seek to solve the problem of pollution that India is the third-largest emitter of greenhouse gases.