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Sustainable Financing FTA

sustainable financing

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53 views19 pages

Sustainable Financing FTA

sustainable financing

Uploaded by

ca.vishal1209
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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Sustainable finance

through Green
Financing
Changing
Finance,
Financing
Ayush Agarwal Change
Executive Trainee
(Finance)
VPG-Kawas
Follow us /ntpc1 / / /Company/ /ntpclimited
Sustainable finance covers a
broader set of the investment
universe, aiming to build
an inclusive, economically,
socially, and environmentally
sustainable world.
--CPI(2020)

Follow us /ntpc1 / / /Company/ /ntpclimited


Spectrum of Sustainable
Financing
Sustainable
Profit Driven Sustainable
Impact investing
Financing Philanthropy
Sustainability and Profit completely
Traditional with
Profit drive investing disregarded in favor of
major focus on
decisions. E.g., RE, social and
profit generation
waste management environmental
potential.
solutions.
Level 1 Level 3

Level 0 Level 2 Level 4


ESG Risk Impact First
Management Investing
Screen out Risky Social and
investments. E.g., environmental
Tobacco production, interests over profits.
animal testing etc. Not to worry about
profit too much.
Green
Financi
ng
Need of the Hour!

India’s Commitment Cheaper cost of Enhanced Popularity More money to be


under Paris Capital made
Agreement The popularity of green Since demand for
ESG Linked Loan or financing has been green energy and RE
Country requires Sustainability-Linked rising considerably, is set to grow
approximately INR Loan can lower driven primarily by exponentially hence
162.5 lakh crores from interest rates hence investors embracing investing through
2015 to 2030 needing reducing cost of socially responsible green financing can
mobilization of green capital. investing. provide decent returns
finance at a much Also, Green bonds in future
faster pace. are issued at
“greenium”
making it cheaper
for issuers in
international
markets.
Landscape of Green Finance-
Globally
Innovative
Instrumen
ts for
Green
Finance
Landscape of Green Finance
in India
$2.5Tn $170Bn $44Bn
To achieve India’s Required per Actual tracked
NDCs from 2015 to year Green finance
2030. in FY 2019-20

Green finance flows in


India are falling far
short of the country’s
current needs. In 2019/
2020, tracked green
finance was INR 309
thousand crores (~USD
44 billion) per annum,
approximately a fourth
of India’s needs.
NTPC Outlook-Green Energy

Reach Leadership
Position in Green Green
Hydrogen. Hydrogen Integrated
Achieve 45-50% Non-
FY2029-30 Energy
Fossil energy Portfolio.
Content Here Company
60GW RE
FY2031-32
03
72.25 GW Installed
Capacity where ~7GW At Present
RE Capacity including
FY2022-23 Renewable
Hydro To add >16 GW RE
Energy
Total 23GW Non- Fossil
FY2025-26
NTPC Outlook-Green Energy

01 Mission
02 Business 03 Financial
Portfolio Soundne
Growth ss

To continuously
Provide Reliable To broaden the strive to reduce
Power and Related base of the the cost of
Solutions in an generation, mix capital leveraging
Economical, with a significant opportunities in
Efficient and proportion of domestic and
Environment clean energy international
Friendly Manner, sources. financial
Driven by markets.
Innovation and
Agility
NTPC Outlook-Green Energy

04 Financial Soundness 05 NTPC’s Materiality 06 Transition Risk


Matrix mitigation strategy
Climate change is a
To promote innovative critical component. NTPC is actively
funding models to Key action taken incorporating
support entry into new includes renewable energy
businesses and Decommissioning of old sources to mitigate
sustain long-term thermal plants and a risks in the transition
growth. revised target of 60 to a low-carbon
GW of RE capacity by economy and enhance
Capacity Capex
Green (Rs. Cr)387730

Financing
- Fund
Mobilizati 18578
on for Current FY 32

Huge Capacity Commissioning Target


Plans (GW)60
Capex

39 GR
Requirem

%
A
C
ent 3.3
Current FY 32
Challenges in Green Financing

Intermittency Lack of Maturity


Greenwashing
and Variability Standardization Mismatch

Investors can't
Renewable energy evaluate new Generally Green
sources are subject To get favorable
projects' Projects pay off in
to fluctuation due to Green finance, many
environmental effects long term. However
weather conditions or entities resort to
or financial financial system is
time of day. It makes falsely reporting their
sustainability without dominated by short
it difficult to evaluate projects as green
a specific project and medium terms
Financial risks. projects.
pipeline and investments.
standardization.
Steps towards charting a Green finance
roadmap

Define and label sustainable


Inclusivity in RE projects by activities through
Income sharing interoperable
arrangements with PAPs. frameworks/taxonomies to
guide capital flows and
better information sharing.

MDBs can use their limited


funds to provide insurance
Introduce supportive and risk guarantees which
regulations to expand domestic can leverage climate finance
demand for thematic debt. many times larger than their
Mandates for pension and own funds.
insurance companies
Call to Action

Strategizing venturing into


Tap into vast pool of sources foreign debt markets which
like Insurance companies, have huge untapped capital.
Pension funds for long term
projects.

Ponder upon issuing Green


bonds in foreign markets to
Planning for raising capital avail the benefit of tighter
through non-conventional pricing and ‘Greenium’.
sources like Green bonds,
Sustainability linked loans etc.
Thank You

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