Institutional Investors Bet Big on Scalable Climate Solutions
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India's clean-tech and EV investment landscape is rapidly evolving, from strong early stage funding to a deep focus on commercial scale and infrastructure, backed by robust frameworks, investors are not financing end-to-end solutions.
According to Grip Invest, 2024 saw a significant rise in funding, attracting USD 564 million, a 37 per cent increase. Sustainable mobility (EV, OEMs, shared mobility, and batteries) accounted for over 70 per cent of funding, close to USD 220 million in Q2.
Coming to institutional investment commitments, the United Kingdom's investment arm, British International Investment (BII) deployed USD 22.5 million in December 2024 into India's EV ecosystem, with a USD 15 million fund towards Everest Fleet and TI Clean Mobolity and a USD 3.5 million to Vecmocon, bringing its total commitment in the EV sector to USD 328 million.
Schemes like Production-Linked Incentives (PLIs), which gave approximately USD 2.1 billion for advanced cell chemistry/batteries, USD 2.3 billion for solar panels, FAME II/III allocated $1.3 B through 2024 with another USD 300 million for FY 25.
According to Crisil, India's green investments are projected to grow fivefold to INR 31 Lakh Crore, which is approximately USD 376 billion by 2030.
Tarun Kapoor, Adviser to the PMO said this at a FICCI conference last year, "On 2‑wheelers, we should have much higher targets and a complete replacement is what we have to look for. On 4‑wheelers, government is fully supportive and there is a need to look at GST on batteries and charging stations," expressing ambition for full electrification of smaller EV segments.
Tax incentives and import reductions seek to correct the heavy dependency on imported EV components .
However, Orf research highlights a USD 44 billion per year climate funding gap and that current public-private investment falls well short of the USD 385 billion required by 2030.
Vasudha Madhavan, Founder and CEO, Ostara Advisors said that the firm is observing a growing shift toward the broader climate tech ecosystem, which now encompasses not just renewables and solar energy, including rooftop solar, but also areas like industrial decarbonization, clean logistics, and energy-efficient warehousing.
"Investor interest is expanding beyond the earlier EV-centric focus to include a diverse range of sectors contributing to decarbonization. However, the key challenge lies in ensuring these companies have strong unit economics and a clear path to profitability and scale. Additionally, there is increasing investor interest in niche segments within the EV space, including EV OEMs and ecosystem enablers such as financing solutions. There's a notable rise in attention from global investors, particularly from APAC, the Middle East, and other regions. We're also seeing the emergence of India-domiciled climate funds aimed at providing growth capital," said Madhavan,
As private capital flows into Indian climate tech, we anticipate significant momentum toward building profitable, scalable businesses,driven by the immense opportunity the Indian market presents, added Madhavan.
The events signal a shift, a shift in investor confidence that is transitioning from speculative to strategic scale plays, laying the groundwork for India's green technology future.
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