In the wake of increased Global-warming and environmental crises there is need of the hour and investments required in establishing financial institutions which will fund the environmental conservation, preservation and help in optimal utilization of resources.
So, fulfill this all around the world we can
see increasing mobilization of resources.
What is Green Banks: The
OECD (2016) defines a green investment bank as “a publicly capitalized entity
established specifically to facilitate and attract private investment into
domestic LCR [low-carbon and resilient] infrastructure and other green sectors
such as water and waste management through different activities and
interventions.”
Capitalisation sources of
these banks: As of now these banks are funded by 70% from Government and
19% from Private capital.
Goals of Green Banks:
1. Mobilize
Private Capital
2. Support
Clean Energy
3. Drive
Down Costs
4. Climate
Impact
5. Equity
and Access
Focus areas of Green Banks
Green banks focus on accelerating
the transition to a low-carbon economy by targeting sectors where clean
technologies are commercially viable but underfunded due to market barriers.
These includes,
1. Renewable
Energy
2. Energy
Efficiency
3. Clean
Transportation
4. Green
Buildings and Housing
5. Climate
Resilience and Adaptation
6. Water
and Waste Management
Which are the major Banks:
1. United
States: The New York Green Bank has mobilized over $1 billion in clean energy
investments. The U.S. Environmental Protection Agency awarded $20 billion in
green bank grants to support clean energy projects nationwide.
2. Australia:
The Clean Energy Finance Corporation (CEFC) has utilized over a third of a $1
billion Household Energy Upgrades Fund to provide green loans for
energy-efficient home upgrades.
3. United
Kingdom: The UK Green Investment Bank, established in 2012, has played a
significant role in financing renewable energy projects.
Green Banking in India
India is exploring the
establishment of a dedicated national green bank to bridge the financing gap in
the renewable energy sector. The NITI Aayog is examining possible structures
for such an institution, considering models like the National Bank for Financing
Infrastructure and Development.
All Green Banks have the mission
to address climate change, though many also have additional objectives such as
improving resiliency or serving low-income communities.
Green Banks make it easier to
finance projects in new markets, geographies and technologies that otherwise
couldn’t be built. This mean cheaper and cleaner energy for customers and more
investment for private capital providers.
The world’s first green bank
is widely recognized as the Connecticut Green Bank, established in 2011
in the United States.
There is a need for rapid
expansion and establishment of new Green Banks across the world to finance the
green initiatives, what you say?
For further reading:
What is a
Green Bank - Coalition for Green Capital
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