5. Concluding thoughts

In order to meet its national renewable energy targets, India needs to mobilize around ~USD 450 billion of financing capital over 2016-2040. In this study, we found that renewable energy in India is an attractive opportunity for institutional investors. Renewable energy is characterized by long investment horizons and reasonably predictable returns. These characteristics, along with strong policy commitments and robust long-term growth prospects of the sector, provide a strong potential match for institutional investment, which seeks lowrisk, long-duration assets.

Despite this apparent match, institutional investors are facing numerous barriers to their investment in the sector. Some of the key barriers faced by investors include off-taker risk, regulation, lack of adequate liquid financial securities, and limited understanding of the renewable energy sector. Foreign institutional investors are additionally constrained by currency risk and lack of adequate size of investments. We have outlined some initial potential solutions from the policy, regulatory, and investor perspectives, which require future research. In particular, potential research could focus on the following topics: • Developing a risk management framework for institutional investors to assess and manage climate risk; • Conducting an exploratory study on the feasibility, structuring, and functioning of a not-forprofit fee based financial intermediary to source deals and projects for investors seeking direct investment in renewable energy sector; • Engaging in theme-based investment research studies in various climate mitigation and adoption sectors; and • Conducting a study on regulations of capital flows from institutional investors into climate sector • Engaging in further feasibility and impact analysis of various solutions.