A Five Pillar Framework for Bankability: Recalibrating India’s Commercial Finance for Climate Action

To address the urgent need for aligning commercial capital with sustainable development, The Energy and Resources Institute (TERI) launched a forward-looking discussion paper titled, A Five Pillar Framework for Bankability: Recalibrating India’s Commercial Finance for Climate Action.

Authored by Mr Sidharth Sinha (Senior Fellow, TERI) and Dr Manish Kumar Shrivastava (Associate Director, TERI), the paper draws on extensive consultations with commercial banks, regulators, development finance institutions, and policy experts.

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The paper argues that India’s climate finance challenge is not just about mobilizing capital, but about making climate investments “bankable by design” within the existing commercial lending architecture. With India requiring an estimated USD 2.5 trillion in climate investments through 2030, commercial banks must play a central role, yet they are currently constrained by five key barriers: a lack of fit-for-purpose lending products, the absence of climate-integrated credit processes, uncertainty around revenues, structural tenor mismatches, and a lack of scalable de-risking mechanisms.

To overcome these hurdles, the paper proposes a strategic five-pillar framework focused on policy and regulatory certainty, stable revenues and cash flows, promoter and delivery capability, risk-sharing and de-risking, and capital-stack fitness, offering a comprehensive roadmap to mainstream climate investments across India’s banking ecosystem.