An abridged version of this article, first published in The Hindu BusinessLine, examines the Reserve Bank of India’s crucial role in enabling India’s energy transition, which requires approximately US$10 trillion in investments to achieve net-zero targets by 2070. Drawing from global central bank experiences, it analyzes RBI’s recent report proposing measures like lowering borrowing costs for renewable energy firms and accepting Sovereign Green Bonds as collateral. The authors suggest additional options for RBI, including altering the Collateral Framework for Statutory Liquidity Ratio (SLR) to support low-carbon assets, establishing Countercyclical-Climate Buffers, and easing External Commercial Borrowing norms beyond the current US$750 million yearly limit for clean energy sectors. The piece also recommends innovative approaches to leverage India’s US$580 billion forex reserves, similar to central banks like Sweden’s Riksbank and Banque de France, to catalyze foreign investment in clean energy infrastructure through risk mitigation initiatives.
Thumnail image: Hindu Businessline
