By Sheetal Bahl
Climate change is inflicting big disruptions globally and India is not any exception. It is estimated that local weather change will result in at the very least 40% of India’s inhabitants dwelling with water shortage by 2050, whereas 35 mn folks may face annual coastal flooding. Climate change may even have a devastating impression on the agriculture sector as yields of rice, wheat, and pulses may fall by virtually 9% by 2050.
Currently, India is ranked seventh on the Global Climate Risk Index 2021, and local weather points may have a huge effect on its aim of constructing a $5 trn economic system over the subsequent few years.
Many entrepreneurs and traders are looking for to handle local weather change by investing in “climate tech” corporations which vary from these into renewable vitality, batteries, and EVs to inexperienced building and low-carbon agriculture. The position of enterprise capitalists (VC) and personal fairness (PE) corporations is essential in serving to determine, fund and scale game-changing cleantech options.
Globally, VC funding in local weather tech corporations elevated from $6.6 bn in 2016 to $32.3 billion in 2021. The scenario in India can also be wanting up. A current examine discovered that over the previous 5 years, 120 local weather tech start-ups raised greater than 200 funding rounds from 272 distinctive traders in India. According to specialists, round 20% of the startups are prioritising sustainability, with suppose tanks just like the Niti Aayog offering monetary help for the event of clean-tech incubation centres and entrepreneurship. This has resulted in local weather tech corporations receiving $1 bn in VC funding from 2016 to 2021. The startup and investor ecosystem can also be working with the federal government to counter the nation’s emission drawback throughout all verticals.
Various elements have contributed to India rising as a haven for local weather tech investments. A conducive coverage setting nudged by PM Modi’s dedication on the COP 26 summit that India will obtain net-zero emissions by 2070 is one in every of them. In addition, the event of low-carbon applied sciences, and the creation of a giant asset base in clear vitality have necessitated the event of recent companies.
Although a lot of this exercise has been focused on giant, utility-scale renewable undertaking financing, there has additionally been a change in focus to result in sustained decarbonisation of the economic system in any respect ranges. For occasion, sustainable mobility has garnered investments of $705 million throughout 84 offers since 2016. Similarly, the vitality sector has accounted for $301 mn throughout 44 offers.
Agriculture is a sector that’s extremely weak to local weather change. Over the final couple of years, there was an exponential stream of investments to the sector. VC corporations have centered on making farmers and farming practices self-reliant and climate-resilient. Similarly, VC/PE corporations are investing in start-ups which are into renewable vitality technology, electrical mobility and ancillary companies like OEMs, part manufacturing, and waste recycling providers.
India’s transition to a net-zero economic system has begun, supported by the federal government and suppose tanks and backed by cutting-edge applied sciences. VC/PE traders are uniquely positioned to help this transformation whereas additionally producing substantial returns. To realise this potential, there may be must scale up the local weather tech ecosystem – by means of coverage, funding, and collaboration.
The author is MD and accomplice, growX Ventures.
Source: www.financialexpress.com”