Here is a summarized version of the article in 200 words:
The Reserve Bank of India (RBI) Governor, Sanjay Malhotra, has proposed creating a shared pool of bankable projects to increase investment and funding for climate-related projects. This idea aims to address the significant funding gap for climate finance, with India needing trillions of dollars by 2050. Experts acknowledge that the proposal has potential, but concerns such as taxonomy, risk management, and project viability need to be addressed.
A shared pool of projects could offer multiple benefits, including providing experienced financial institutions with a collection of financially viable and investment-ready projects. However, experts caution that success depends on agility, taxonomy, and risk management. The RBI has taken steps to address climate-related financial risks, including creating a dataset repository and issuing guidelines on climate-related financial risk disclosure.
Experts also emphasize the need for banks and non-bank finance companies to develop skills and knowledge to assess and finance climate change mitigation projects. The idea of pooling non-return-oriented projects with return-oriented ones raises concerns about cross-subsidization and may only work if both types of projects belong to the same entity. Overall, the RBI’s proposal aims to address the significant funding gap for climate finance, but more work is needed to ensure its success.