Asian banks are still reluctant to lend sizeable amounts for renewable energy projects, despite their growing importance in India and China, categorising them at the same level of risk as small and medium-sized companies, according to a report by the Asian Development Bank (ADB). The ADB said that while there were some positive developments on renewables projects in India, it was not enough to meet its target of doubling clean power capacity from 20% to 30% within five years. Given the capital market – including venture capital – is not well developed in many Asian countries, and that the Asian financial system is dominated by banks, such lenders are the main source of funding for projects. However, the report suggested an array of alternative funding methods, from green bonds to community-based financing, and urged governments to make clean energy projects part of their sustainable development plans, taking the pressure off banks.
Asian banks are still reluctant to lend sizeable amounts for renewable energy projects, despite their growing importance in India and China, categorising them at the same level of risk as small and medium-sized companies, according to a report by the Asian Development Bank (ADB). The ADB said that while there were some positive developments on renewables projects in India, it was not enough to meet its target of doubling clean power capacity from 20% to 30% within five years. However, the report suggested an array of alternative funding methods, from green bonds to community-based financing, and urged governments to make clean energy projects part of their sustainable development plans, taking the pressure off banks.