NbS interventions in India heavily rely on public finance, indicating a significant disparity between government and private sector contributions. Some of the key reasons for low private sector investment and engagement in NbS are limited long-term visibility on investment outcomes, uncertain time horizons for economic returns to materialize, lack of standardized approaches for long-term impact evaluation, insufficient clarity and incentive on the policy and regulatory environment, weak risk-adjusted returns, and a limited understanding of successful and viable business and investment models for NbS.

Financial and business mechanisms serve as complementary frameworks essential for unlocking the potential of urban NbS. Financial mechanism focuses on evaluating the financial feasibility of an NbS project and making the case for capital allocation to unlock and direct finance toward urban NbS effectively. Such financing mechanisms can be from varied sources of financing- public, private, or blended sources and through multiple financial instruments, including debt, equity, grants, and risk management tools that can operate independently or in combination. Business mechanisms focus on how a project creates, delivers, and captures value and recovers costs by establishing clear value and return propositions for its proper recognition, communication, and monetisation.

Because limited creditworthiness and narrow revenue bases make it difficult for smaller ULBs to raise capital independently from debt-based instruments like green municipal bonds. Pooled financing and insurance-based mechanisms reduce individual fiscal stress and give such municipalities collective bargaining power to buy insurance for their assets from climate change induced risk.

Technical assistance and capacity building on know-how for writing strong proposals, raising funds, and tracking results are critical for enabling long-term NbS project agreements at different levels of government to support NbS at the planning stage. The framing of NbS projects around environment, climate, and sustainability are becoming key entry points and investment mandates that help connect NbS to sectors where funders and policymakers are already active, making it easier to build momentum.

Creative business mechanisms and cost recovery mechanisms like charging premiums, linking projects to new revenue streams (e.g., transport from restored canals), and ensuring that benefits are shared, especially with communities dependent on natural resources for their livelihoods enable monetisation of co-benefits, such as improved health, biodiversity, or community livelihoods. On the investment side, scale and structure matter. Investors weigh a project’s alignment with climate goals, government support, community risks, and whether it creates lasting assets. Tools like guarantees can make projects more attractive, while debt-based financing hinges on solid cashflow projections and measurable carbon outcomes.

Discoms are the central link in the electricity supply chain. Their financial turnaround is fundamental to achieving the policy objective of providing uninterrupted 24×7 electricity supply to all consumers. A financially healthy utility is better positioned to invest in infrastructure upgrades and support India's clean energy transition. Furthermore, improving financial viability reduces the need for expensive short-term credit to cover revenue shortfalls, which is crucial for maintaining affordable power for consumers.

Smart meters are essential for plugging energy leakages caused by inaccurate billing, which the study identified as a major driver of losses. By automating data collection, smart meters ensure timely and accurate billing, eliminating the issue of human interference in the billing process. They also enable the targeted detection of electricity pilferage and allow for early redressal of metering issues. Prioritising smart meters in high-loss areas can help discoms accrue quick returns on investment and improve overall billing efficiency.

The financial health and operational stability of a distribution company (discom) are intrinsically linked to consumer payment behaviour. Consistent, timely bill payments ensure a steady revenue stream, which is vital for power procurement, managing daily operations, and funding network maintenance—all necessary fora reliable, 24x7 electricity supply. Conversely, irregular payments and accumulated arrears severely strain a discom's working capital. This results in the utility incurring Late Payment Surcharges for delayed payments to generators, which can directly compromise supply reliability. To cover these shortfalls, discoms are often forced to secure high-interest loans, increasing the cost of power supply and hindering their ability to maintain quality service.