Financial Innovations for Scaling Up Green Hydrogen Investments in India

Abstract

Green hydrogen is a promising new technology with the potential to decarbonize a wide range of sectors. However, the high cost of production and lack of established infrastructure are major challenges that need to be addressed. This paper identifies financial challenges and opportunities for green hydrogen projects in India and delves deeper into potential financing mechanisms and investment models for green hydrogen projects in India. Furthermore, the study also attempts to develop recommendations for policymakers and investors on how to support the development of green hydrogen in India.

The paper concludes by suggesting some strategies and policies which might help overcome the challenges faced by the green hydrogen sector due to barriers affecting investments. These strategies include facilitating the development of innovative and standardized financing models, and risk assessment frameworks, implementing risk mitigation strategies, exploring revenue-sharing models and power purchase agreements, promoting the use of sustainable finance instruments, encouraging project developers to incorporate ESG criteria in project planning, implementation, and reporting, promoting corporate and institutional investments in green hydrogen, conducting thorough risk assessments to provide transparent information on different risks, highlighting the environmental and social benefits of green hydrogen projects, engaging with institutional investors, impact investors, and corporate entities to showcase green hydrogen projects as attractive investment opportunities. By implementing these strategies and policies outlined in this research, stakeholders can help to overcome the challenges and create an enabling environment for the development of green hydrogen in India. Consequently, this will help to accelerate the transition to a cleaner energy future.