14 hours ago
- Business
- New Indian Express
Indian banks still prefer funding fossil fuels project amid rising risk to investment: Report
NEW DELHI: Even as India aggressively pushes for a clean energy transition, Indian banks have substantially financed fossil fuel and coal-fired power projects—totalling approximately USD 29 billion between 2016 and 2023—which could hinder and complicate the path to achieving net-zero emissions, states a recent report.
Prepared by Climate Risk Horizon, a Bangalore-based non-profit organisation that monitors climate-related risks for investors, the report highlights that the State Bank of India (SBI) and private lenders such as Axis Bank and ICICI Bank were among the top financiers of coal.
Titled 'Stuck in the Past: Coal Ties Hinder Indian Banks' Energy Transition' the report indicates that India's leading banks invested around USD 29 billion in coal during the specified period. Of this amount, approximately USD 15.2 billion was provided as coal loans, while USD 13.5 billion was allocated to coal underwriting services
Further segregating the data, the analysis shows that public banks provided roughly 75% of the coal loans while private banks financed roughly 83% of the total underwriting.
According to the report, over these eight years, the amount of coal loans fluctuated significantly. Still, coal underwriting by Indian banks remained relatively stable with an average of USD 1.7 billion per year.
Underwriting service is a process of mitigating risk for financial transactions by financial institutions by guaranteeing repayment in case of damage or financial loss.
