Varad, Akhilesh, welcome. Varad,to you first.
Climate finance is very high on the agenda at the moment.
Why is that the case?
Why is it given such prominence right now?
You know, climate finance is the real elephant in the room in the
climate change crisis.
All the estimates that we have, including BCG analysis, shows we
need between $3 to $5 trillion a year until 2050 to tackle this issue.
And currently, we're doing about one-fifth of that.
So this is the challenge.
However, I see the glass as half full for the reason that you can
see around you.
Everybody is showing up to try and solve the problem.
And in the first three days of COP, we have seen some massive
commitments on climate finance, led by the host country, the
UAE, but also supported by other governments, by the private
sector, and by the multilateral development banks.
Akhilesh, let's talk specifically about blended
finance.
It's another area that we're hearing a lot about.
What does it mean in the context of India?
So blended finance is an important tool in trying to
complement wherever markets for finance have failed in some
sense.
There are either newer industries, newer technologies,
newer ecosystems that need to be set up, which may not
necessarily meet either the cost of capital that typical
commercial investors may want or not have the time horizon or the
risk horizon that typical investors may have.
So you need different types of capital, which can then offer
some more respite, let us say, to some of these ecosystems,
some of these projects, etc., so that they can come into
fruition.
There is a lot of experimentation that is required
in just getting the carbon out of the air and reducing the
amount of carbon.
So we need some amount of blended finance.
Having said that, in our own understanding and estimate, and
we've been doing a lot of climate investing in India
specifically, even getting to a double-digit number for blended
finance in the capital stack, a 10% sort of a number, is
fantastic.
So there we go.
So, potential there.
Let's talk specifically about your fund. Where are the
opportunities? Talk to me about that, if you would.
National Investment and Infrastructure Fund is a $5
billion fund, raises capital from the government of India,
which offers in 49% of the capital that we invest.
The rest 51% comes in from global sovereign wealth funds,
MDBs, and pension funds,
so people who have very long term sort of outlook and hence
for whom climate is an important opportunity as well as a risk
that they need to protect against.
We've invested across the board on climate-related technologies,
whether it's in renewables, whether it's in smart meters,
whether it is in electric vehicles.
We also run a couple of what are called shadow banks, about a $4
billion portfolio which again provides a debt financing to
some of these sectors.
But what is your takeaway for leaders in this debate?
I'm going to shamelessly steal something I heard earlier today,
which is the "ABC." We need to accelerate, we need to blend,
and we need to commit.
I think that's the that's the bottom line.
And, as I said, there is a lot of hope and optimism, given the
kind of commitments and announcements that have been
made this week, including on often forgotten aspects of the
climate crisis like adaptation and resilience and loss and
damage.
So, overall, I think a lot of hope and optimism coming out of
this week.
Varad, Akhilesh, thank you so much.
Thank you.