Investment Sizing India’s 2070 Net-Zero Target

This study evaluates investments required to achieve India’s net-zero emissions target of 2070. Achieving net-zero involves technology pathways as well as financial flows. These finance flows, or investments, also known as total investment, are required to fund the construction of the associated physical infrastructure. The mobilisation of investments to achieve net-zero expectedly will be sourced from domestic banks, Non Banking Finance Companies (NBFC), and debt capital markets, both domestic and international. However, an investment gap will remain between the total investment required to achieve net-zero and the amount that can be reasonably mustered from conventional sources. Bridging the gap requires investment from overseas, likely on concessional terms. The value of concession required is assumed equivalent to the cost of hedging, irrespective of whether the capital flows are equity or debt. The value of the concession represents the real value of external investment support required for achieving net-zero.

The study analyses the total investment, investment gap and investment support needed under four net-zero scenarios for India, including the declared 2070 target. 

• The total investment estimated pertains to electricity (generation, integration, transmission, and distribution), hydrogen (production), and vehicles (manufacturing).
• Under a net-zero 2070 pathway, India would need a total investment of USD 10.1 trillion and the investment gap would be USD 3.5 trillion. 
• The aggregate investment support required by India to achieve its 2070 net-zero target will be USD 1.4 trillion at an average of USD 28 billion per year.

Table 1: Total investment, gap & support for India’s 2070 net-zero target

Source: CEEW-CEF analysis

Note: Amounts in constant 2020 USD billion

• The decadal investment support requirements are not flat but rather increase significantly as we near respective net-zero years.
• Had India chosen a 2050 net-zero target year, the average annual investment support requirements in decades 2 & 3 (USD 47bn and USD 80bn respectively) would have been 3.9x and 2.3x the corresponding values for the 2070 target year selected.

Table 2: Investment gap per decade for India’s 2070 net-zero target

Source: CEEW-CEF analysis

Note: Amounts in constant 2020 USD billion