New Delhi, India, November 29, 2017 –
South Asia’s ambitious plans to meet its climate targets under the Paris
Agreement represent $3.4 trillion worth of investment opportunities in
cities and infrastructure by 2030, according to Climate
Investment Opportunities in South Asia,
a new report by IFC released today by IFC, a member of the World Bank Group.
Bangladesh, Bhutan, India, Maldives, Nepal
and Sri Lanka, which represent 7.38 percent of global carbon dioxide emissions,
have enormous but untapped opportunities in climate-smart investing in
sectors including renewable energy, transport, green buildings, urban water,
climate-smart agriculture, and municipal solid waste. The report identifies
$3.1 trillion of climate investment opportunities in India alone, along
with $172 billion in Bangladesh, $42 billion in Bhutan, $2 billion in the
Maldives, $46 billion in Nepal, and $18 billion in Sri Lanka.
“The only way that the South Asian countries
can take advantage of these climate investment opportunities is with a
strong and engaged private sector,” said IFC CEO Philippe Le Houérou.
“We also need to have a comprehensive approach to creating markets for
climate business in key sectors. That means putting in place necessary
policy frameworks, promoting competition, and building capacity and skills
to open new markets.”
The impacts of climate change on business
assets, supply chains, and business interruptions are already a major concern
for South Asian companies. This concern coupled with the urgency of addressing
the air pollution reinforce the need for immediate action while capitalize
on the existing investment potential.
The South Asia region has seen a surge in
investment in clean energy and energy efficiency in recent years, contributing
to significant development gains. IFC’s report highlighted two sectors
for future growth: due to rapid urbanization, green buildings represent
an investment potential totaling more than $1.5 trillion across South Asia
between 2018 and 2030; and green transport infrastructure and electric
vehicles create an opportunity of over $950 billion to 2030. Such investments
generate further benefits by providing access to markets, enabling trade,
and ensuring mobility, which in turn stimulate economic growth and private
According to the report, other significant
opportunities in the region include:
- India: renewable energy and electric vehicles.
The impressive national target of generating 175 GW of renewable energy
by 2022 represents almost $448 billion in investment potential. This will
be crucial given India’s aim to electrify all new vehicle sales by 2030,
creating a potential investment opportunity of almost $670 billion if this
goal is fully met.
- Bangladesh: climate-smart urban wastewater
and agriculture. The government’s prioritization of wastewater infrastructure
projects creates a $13 billion investment opportunity and climate-smart
agriculture sector could see investments of more than $9 billion.
- Bhutan: hydropower and electric
transport. Developing Bhutan’s 25,000 MW of economically feasible
hydropower potential will generate an investment opportunity of over $40
billion as well as substantial export revenues. The government’s
ambitious electric vehicle target creates over 320 million worth of potential
for investment in the sector.
- Maldives: climate-smart infrastructure.
The country’s goals to climate-proof its infrastructure against rising
sea levels and extreme weather events translates to an investment opportunity
of at least $1.5 billion in transport-related infrastructure and $200 million
in green buildings by 2030.
- Nepal: hydropower and climate-smart agriculture.
Achieving Nepal’s ambition to install 12,000 MW of hydropower capacity
creates an investment opportunity of $22.5 billion. The government’s policy
push to make its agricultural sector more climate friendly, including through
the use of efficient technologies represents an investment opportunity
of $4.8 billion.
- Sri Lanka: Municipal solid waste
management and climate-smart urban wastewater. Recognizing the need
for solid waste management Sri Lanka’s national policies create a $3.5
billion opportunity for investment in the sector. Wastewater management,
identified as a key priority, opens an investment opportunity of more than
The countries in the region are taking the
lead in fulfilling their Paris commitments. Scaling and replicating such
progress across South Asia will require catalyzing private finance and
creating markets for climate business solutions through policies, financial
innovations, and business models targeted at sector-specific local conditions.
The report provides recommendations on how each country can further accelerate
climate-smart investing, including demonstration projects to signal commercial
viability and raise awareness, and promoting public private partnerships
through streamlining procurement and processes.
IFC is strongly committed to supporting the
private sector in the region. Since 2005, IFC has invested $2.6 billion
of its own funds in long-term financing for climate-smart projects in South
Asia and additionally mobilized almost $1 billion from other investors.
The report is a follow-up to the Creating
Markets in Climate Business report
published earlier this month.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with more than 2,000 businesses worldwide, we use our capital, expertise,
and influence to create markets and opportunities in the toughest areas
of the world. In FY17, we delivered a record $19.3 billion in long-term
financing for developing countries, leveraging the power of the private
sector to help end poverty and boost shared prosperity. For more information,