LONDON: The Indian and UK governments on Thursday agreed a new tie-up to finance inclusive, resilient and sustainable infrastructure in India by harnessing public and private capital to meet the country's low-carbon goals.
Climate Finance Leadership Initiative (CFLI) India initiative, which is backed by the City of London Corporation and led by Bloomberg's CFLI, was announced at the 11th UK-India Economic and Financial Dialogue (EFD) held via video conference between finance minister Nirmala Sitharaman and her British counterpart Rishi Sunak.
"Supporting India's green growth is a shared priority so I'm pleased that we've announced a USD 1.2 billion investment package, and launched the new CFLI India partnership, to boost investment in sustainable projects in India as the UK gears up to host COP26," said Sunak.
"We expect that the platform would be able to mobilise private capital, at scale, into climate and environment sectors, particularly green and resilient infrastructure," noted Sitharaman.
The aim of the CFLI India project is to drive capital into India through public, private, and multilateral initiatives to help the country meet its 2015 Paris Agreement commitments, which include a pledge to reduce emissions intensity of GDP by 33-35 per cent by 2030.
"The Climate Finance Leadership Initiative is working to eliminate barriers to investment and create market conditions to drive more capital to green projects and this collaboration between India and the UK, two of the world's largest and most dynamic economies, can create a model for countries around the world to learn from," said CFLI Chair Michael R Bloomberg, UN Special Envoy on Climate Ambition and Solutions.
The City of London Corporation, the governing body of the financial hub of the UK capital known as the Square Mile, said it will support the initiative by providing a secretariat from London and the organisation's long-standing representative office in Mumbai.
"CFLI India is a genuinely new approach to mobilising capital at the scale and pace demanded by the global transition to net zero," said William Russell, the Lord Mayor of the City of London.
"In order to raise the trillion of dollars of investment needed, we must connect London's innovation and talent together with India's dynamism and industry. Together we can cut emissions and fight back against climate change," he said.
City of London Corporation Policy Chair Catherine McGuinness said London, as a leading international financial centre and global hub for green finance, is well placed to support this as a world leader in green finance, innovation and capital raising through CFLI India.
"India has already taken bold steps to decarbonise its economy, but billions of financing is still needed to help the country meet its climate commitments," she said.
The announcement of CFLI India comes in advance of November's UN Climate Change Conference better known as COP26 in Glasgow, where the City of London Corporation and Green Finance Institute are holding a hybrid summit on green finance.
"It is critical that as we move towards a more sustainable future that financial markets like London partner with leading countries like India to develop projects that address climate change," said Shravan Joshi MBE, City Corporation representative at CFLI.
CFLI India will be co-chaired by Shemara Wikramanayake, Managing Director and Chief Executive Officer of Macquarie Group, and Natarajan Chandrasekaran, Chairman of Tata Group, and comprises major private sector Indian and multinational corporates and financial institutions.