GCF, ADB Launch $200M IGFF to Drive Clean Energy Innovation in India

In a major push toward accelerating India’s energy transition and achieving net-zero emissions by 2070, the Green Climate Fund (GCF) has approved $200 million in concessional finance to support the Asian Development Bank’s (ADB) India Green Finance Facility (IGFF). This groundbreaking blended finance initiative is designed to mobilize large-scale public and private investment in emerging clean energy sectors that are critical to India’s long-term sustainability goals.

The approval, granted at the GCF’s 42nd Board meeting on July 1, 2025, marks the GCF’s first collaboration with ADB in India and reflects a growing commitment to pioneering climate finance models that promote innovation, inclusivity, and resilience.

Catalyzing Investment in Hard-to-Abate Sectors

India has already achieved significant progress in scaling up renewable energy—particularly solar and wind—but further decarbonization is needed in hard-to-abate sectors such as industry, agriculture, and transportation. These sectors are responsible for a sizable portion of emissions and require targeted solutions and patient capital to enable transformative change.

“This is a significant milestone in helping India transform its energy systems to meet its net-zero emission target by 2070,” said Pradeep Tharakan, ADB’s Director for Energy Transition. “While India has made tremendous progress in scaling up wind and solar energy, it is now seeking to decarbonize sectors that are traditionally more difficult to abate.”

The IGFF is strategically crafted to address this gap. By combining concessional capital from GCF with ADB’s institutional expertise and co-financing capabilities, the facility will provide catalytic support to India’s development finance institutions (DFIs) to unlock new avenues for clean energy investment.

IGFF: A New Model for Blended Climate Finance

At its core, the India Green Finance Facility is a blended finance platform that will work through national DFIs. ADB will channel funds via lines of credit to qualifying DFIs, which will then identify and develop a pipeline of innovative clean energy projects. The approach ensures country ownership, scalability, and alignment with India’s broader development objectives.

Key sectors and technologies supported under the IGFF include:

• Round-the-clock renewable energy (RTC RE)

• Green hydrogen production

• Compressed biogas

• Electric transportation in rural areas

• Decentralized renewable energy (DRE) solutions

Each of these areas plays a crucial role in reducing emissions while promoting inclusive development and energy access.

De-Risking Clean Energy with Credit Guarantees

One of the IGFF’s most transformative innovations is the creation of a $65 million risk-sharing facility, which aims to support small and mid-sized developers—particularly in the compressed biogas sector. The facility will offer partial credit guarantees, lowering the perceived risk for commercial banks and helping unlock much-needed capital for climate projects that currently struggle to secure financing.

Compressed biogas, for example, has enormous potential as a clean fuel for rural and industrial applications but remains underdeveloped due to technological, regulatory, and financial barriers. The credit guarantee mechanism provides a scalable tool to mitigate these barriers and stimulate market activity.

GCF's Vision for Transformative Climate Finance

“This partnership reflects our commitment to driving innovative, high-impact solutions that tackle climate change and promote inclusive, sustainable development,” said Hemant Mandal, GCF’s Director for Asia and the Pacific. “The GCF is proud to support the IGFF as it creates a replicable model for other countries looking to harness concessional finance to accelerate clean energy adoption.”

The GCF, established under the UNFCCC framework, is the world’s largest dedicated climate fund, committed to financing low-emission and climate-resilient development in developing countries.

Looking Ahead: A Blueprint for Energy Transformation

The IGFF sets a precedent for how multilateral development banks and global climate funds can work with national stakeholders to foster sustainable investment ecosystems. By targeting the early adoption of high-risk but high-impact technologies, the facility aims to crowd in commercial finance, build investor confidence, and drive systemic change across India’s energy value chain.

In the coming years, the program is expected to support thousands of jobs, strengthen rural livelihoods through DRE and biogas solutions, and accelerate India’s progress toward meeting its climate targets.

As a replicable and scalable model, the IGFF holds promise not just for India, but for other emerging economies seeking to catalyze clean energy transitions using innovative financing instruments.