NaBFID to channel global green funds into Indian infra projects, gets govt approval, ET BFSI

Rajkiran Rai G., MD, NaBFID
India’s infrastructure financier National Bank for Financing Infrastructure and Development (NaBFID) is working to channel global green capital into India’s infrastructure sector, as it receives government approval to become an accredited agency for the Green Climate Fund (GCF).

Internationally, there is GCF money available, but it is not finding its way to India in a big way. We need to channelise this, and NaBFID is the right agency to do that. The Government of India has already approved our request to be an accredited agency for GCF. Now, we are working with international agencies and multilaterals so that the money available internationally for GCF purposes can flow into sectors to make infrastructure projects more sustainable.NaBFID Managing Director Rajkiran Rai G. told ETBFSI in an interview.

According to Rai, while projects that are inherently green, such as solar and wind, are already receiving funding without much challenge, the real concern lies in retrofitting existing infrastructure or manufacturing setups to make them sustainable.

There are projects which are inherently green. Like if you are doing a solar or wind project, it is green from the beginning. Those projects are getting funded, there is no problem, the problem comes in making the existing infra, what we call sustainable infra, low carbon.Rajkiran Rai G., MD, NaBFID

For example, converting thermal plants or steel plants to greener operations entails significant additional costs. “Today, if I am doing a project, we have a model where we assess it for environmental and social impact, we call it E&S under ESG. But many of these projects, like a road cutting through a forest or a transmission line impacting the environment, have their own challenges. To reduce the carbon footprint, many of these have to be made sustainable,” he said.Rai spoke on the gap in cheaper green financing for such transitional projects. “If green financing is cheaper, say, if a thermal plant has to invest to reduce their carbon footprint, can we give them cheaper credit because they’re trying to be green? That is not happening currently.”

The objective is to enable sustainability-linked finance that allows for economic viability of infra projects that seek to reduce emissions.

Rai also emphasised the need to build a robust carbon credit market in India. “One model is penalising people who are polluting and transferring that to green companies, like the carbon credit model,” he said. He cited an example from the plastic recycling industry. “If someone puts up a plant to process water bottles, there is a cost to do it. Now if the bottle producer pays the processor through a carbon credit mechanism, then these projects become more sustainable.”

• Published On May 15, 2025 at 08:32 AM IST

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