August 4, 2025

Mumbai, India has rapidly positioned itself as a key destination for climate capital, attracting over $2 billion in investments during the past year, according to data from Bloomberg New Energy Finance (BNEF). This trend is primarily driven by the rising demand for clean electric alternatives and a significant push from heavy industries toward zero-emission technology. Major climate investors like TPG Rise Climate, Breakthrough Energy Ventures, LeapFrog Investments, Lowercarbon Capital, and Fullerton Fund Management have recently transitioned from cautious pilot projects to making larger strategic investments within India's energy and clean tech sectors. The influx of climate capital is not just a response to environmental urgency but also shows a convergence of favorable factors. These include cost parity with conventional energy sources, increasing consumer demand, and supportive policy frameworks that facilitate growth in clean energy. Notably, the shift in demand is seen in essential services such as logistics, cooling, and distributed power, rather than just discretionary consumption. This transformation provides confidence to investors regarding long-term scalability and durable profit margins. Nakul Zaveri, a partner and co-head of Climate Investment Strategy at LeapFrog Investments, noted a marked increase in growth, where infrastructure capital is focusing more on circularity, e-mobility, original equipment manufacturers, battery lifecycle management, and energy storage solutions. LeapFrog Investments plans to commit over $500 million to various climate solutions, part of which includes a $60 million investment from the European Investment Bank (EIB) with additional backing from the International Finance Corporation (IFC) and Temasek. On a global scale, climate finance has exceeded $2 trillion in 2024, with private capital significantly moving into electric mobility, battery storage, and green infrastructure. Recently, Singapore-based Fullerton Fund Management made its first investment through the Fullerton Carbon Action Fund, acquiring an equity stake in Routematic, an AI-driven transportation company in India. Akhil Jain, an investment lead at Fullerton Carbon Action Fund, expressed optimism, stating that climate finance in India is set to rise, driven increasingly by market economics. He highlighted that clean energy options, particularly in electric transport, are now at or beyond cost parity with traditional solutions. This dynamic shift is altering investment paradigms, with funds now primarily focusing on companies demonstrating strong revenue models combined with proprietary technologies. Shailesh Vickram Singh, the founder of Climate Angels, remarked on the surging demand for low-emission, resource-efficient technologies, especially within the transportation and energy sectors. Moreover, investors are now more inclined to support integrated operators capable of constructing whole value chains rather than pursuing isolated innovations. Zaveri pointed out that high-risk ventures are now receiving premium investment, particularly among operators implementing extensive climate strategies. This trend is consistent with a growing understanding of the necessity to embed adaptation into climate solutions. Vasudha Madhavan, founder and CEO of Ostara Advisors, an investment bank centered on electric mobility, observed, "Capital is now directed toward firms that not only reduce emissions but also enhance resilience across various sectors, including waste management, cooling, and mobility." Industry experts are confident that this marks a pivotal moment for climate finance in India. Over the next few years, it is anticipated that the focus will deepen on scalable technologies that can drastically transform sectors traditionally seen as high-emission contributors. Madhavan added, "We are witnessing a significant shift in climate finance from small, fragmented investments to well-planned, high-value commitments that can not only accelerate the clean transition but also do it on a larger, more impactful scale." This evolution in investment strategy signals a promising future for India's role in combating climate change through innovative clean energy solutions.

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Tags: Climate finance, Clean energy, Electric vehicles, Investment, India,