The BES 2026 session titled, “Financing Global Power Transition: Converting ambition into bankable projects”, explored the critical shift from technological challenges to the urgent need for massive financial mobilisation and robust investment ecosystems in the energy sector. It featured insights from Parminder Chopra, Chairman and Managing Director, Power Finance Corporation; Dr Katan Hirachand, Chief Executive and Chief Country Officer, Societe Generale Bank; Shashank Joshi, Deputy CEO, MUFG India, and Head of Global Corporate Banking, India, MUFG Bank; Ravisankar Ganesan, Director, Finance, Power Grid Corporation of India; and Kaniaru Wacieni, Senior Investment Director, Africa 50. The session was moderated by Dr Marko Lackovic, MD and Senior Partner, BCG. Edited excerpts…
Investor confidence
India has made notable progress in energy access and renewable deployment, evolving beyond conventional renewable projects to more complex hybrid, round-the-clock and green energy solutions. A strong track record of timely project execution, along with backward integration in areas such as solar manufacturing, has helped build confidence among international investors and lenders. The integrated project development model, where developers manage the entire value chain, from project conceptualisation to execution, has further strengthened delivery capabilities and reduced risks.
The key enablers for financing include favourable policy measures, predictable long-term revenue streams, robust contractual design with clear risk allocation, and aligning financing tenures with asset life. Bankability, however, extends beyond individual projects and must be strengthened across the broader ecosystem to ensure sustained investment flows. Further, a green taxonomy could prove to be a game changer for India’s energy transition. This would require the identification of priority areas and the establishment of a common framework that enables policymakers, lenders and investors to clearly define what qualifies as “green”.
Managing risks
The global policy environment and international climate commitments are creating strong momentum for financing decarbonisation initiatives. Significant capital has been deployed towards renewable energy, storage and supply chain development, alongside support for scalable green energy platforms. However, key risks persist from a lender’s perspective, particularly around evolving technologies and the readiness of transmission infrastructure. Project delays remain an inherent challenge in large-scale infrastructure development, highlighting the need for mechanisms that can mitigate or compensate such risks to sustain investor confidence. Constraints related to limited availability of domestic long-term capital continue to drive dependence on global financing sources. Strengthening institutional frameworks, potentially through a central coordinating mechanism, could help streamline processes, improve risk allocation and unlock deeper pools of long-term capital.
While renewable energy capacity continues to expand rapidly, transmission infrastructure remains the backbone of the power system. The intermittent nature of renewable generation introduces complexities in maintaining grid stability, requiring careful management of variability, frequency and voltage. Addressing these challenges calls for both technological advancements and sustained investment in transmission networks. A stable regulatory framework, supported by structured tariff mechanisms, periodic reviews and assured returns, has played an important role in building investor confidence and enabling long-term financing in this segment. In addition, battery energy storage systems are emerging as a critical complement, enhancing grid flexibility and efficiency.
The challenges of financing energy and infrastructure projects are not unique to one region and reflect broader global trends. Large financing gaps persist, driven by issues such as risk allocation, weak credit structures and policy uncertainty, particularly around tariffs and contractual frameworks.
Outlook
There is a growing recognition of the need to move beyond a project-by-project approach towards programmatic models that incorporate standardised contracts and agreements, enabling faster and more efficient scaling of projects. Mobilising private capital is essential in this context, especially given the limitations of public funding. Domestic capital sources, such as pension funds, remain significantly underutilised and present a major opportunity. Unlocking this capital can help reduce financing costs, improve affordability and support long-term, sustainable investment in infrastructure.
