India's clean energy boom: Why the City of London should be paying attention

The City of London wants to be the world’s leading centre for sustainable finance. It needs scalable, repeatable opportunities. It should put its weight behind one of the world’s largest green growth stories — India’s renewable build-out.

India’s renewable energy capacity reached 263 gigawatts by January 2026, and growth is set to accelerate as it pushes towards its 500-gigawatt target by 2030. The scale of financing required is vast, and so too is the investment opportunity. Wood Mackenzie forecasts that India will require around $1.5 trillion in energy transition investment between 2026 and 2035. NTPC Limited, the country’s largest power utility, alone has outlined an $80 billion capital expenditure plan through 2032, with 40% of its planned new capacity in renewables. 

India’s energy sector continues to rely heavily on domestic bank lending, while bond markets remain relatively shallow — both onshore and offshore. While India has managed record renewable capacity additions, continued high costs of capital versus OECD countries risks creating a vicious cycle in which insufficient financing slows deployment, raising transition costs and further deterring investment. The City’s role should be obvious: helping reduce this barrier and unlock capital.

The City’s (disappearing) advantages

The City played an early role in developing the market: the London Stock Exchange hosted the International Finance Corporation’s pioneering green masala bond and some of the first Indian sustainable debt issuances. Yet the deal flow has slowed subsequently, amid challenging macroeconomic conditions, higher interest rates and low appetite for currency risk. In February 2026, Indian renewables company ReNew’s $600 million green bonds — listed on Gujarat International Finance Tec-City (GIFT City) with withholding tax exemptions — attracted international investors. Singapore, meanwhile, remains a leading hub for Asian USD debt distribution.

Having said this, the City provides a full suite of sustainable finance services in close proximity — verifiers, advisers and structuring counsel. This has helped lay some groundwork for UK-India cooperation on the energy transition: the UK–India Infrastructure Financing Bridge, a partnership between the City and India’s policy planning body NITI Aayog, was established to support project finance; the UK–India trade agreement, which entered into force on 15 July 2026, will open new trade corridors; British International Investment has also made commitments to support the transition. However, actions need to go faster to match the pace of the transition.

The City as international standard-setter

First, the City can push for high sustainable finance standards with demonstrable implementation in India, creating a practical proving ground and a stepping stone for wider international harmonisation. This contextualises and works in tandem with the ongoing “transition finance” agenda. Doing this would help translate stronger domestic fundamentals into a clearer investment case for international capital, beyond co-financing mechanisms alone. 

In India’s power sector, improving project-level credit strengths — backed by supportive regulatory reform and policies, and stronger offtaker credit quality — makes assets more bankable. Credit differentiation between thermal and renewables can serve as a building block for assessing the credibility of utilities’ transition plans and for strengthening the case for green-labelled debt with use of proceeds ring-fencing. 

But for international investors seeking to scale capital flows into credible sustainable finance, stronger credit fundamentals need to be in line with credible transition planning actions and sustainability labels aligned with international standards. By adopting these, issuers can create signalling effects that carry weight across markets, thereby broadening access to capital. For the City, the benefit is a stronger role in shaping the integration of climate-related factors into global capital markets. 

The City as a capital raising centre

Second, the City should attract a stronger pipeline of Indian issuers to its capital-raising platform. Regulators could consider offering financial incentives, such as subsidised access to London’s verification, legal and banking services. Complementary reforms should aim to encourage demand from UK pension funds and insurers seeking long-duration assets, alongside measures to deepen the GBP/INR swap market and to enable GBP-denominated bond issuances.

Prominent prospective issuers include not just sovereign but also quasi-sovereign issuers such as NTPC, government-related financial institution Power Finance Corporation and the Indian Renewable Energy Development Agency. Given the scale of their funding needs, these issuances are ones the City should not miss out on, as they could materially deepen London’s sustainable bond market and generate repeat business across the City’s wider financial ecosystem.

India’s clean energy boom is already investable, large and growing fast. The investment fundamentals are improving, offering one of the clearest opportunities for London’s financial ecosystem to turn sustainable finance ambition into actual capital flow.