India has delivered the evidence; COP31 must make clean capital cheaper

India has already beaten its 2030 clean energy targets, but scaling up round-the-clock renewables will require COP31 to deliver cheaper global capital and lower risk premiums.

India will arrive at COP31 with an unusual credential: it has already surpassed its nationally determined contribution (NDC) of achieving 50% installed power capacity from renewables by 2030. By July this year the share had soared past 54%, with more than 300GW of solar, wind, hydro, nuclear and biopower now feeding into the grid. In fiscal year 2026 (FY26), the country added a record 55GW of clean power capacity.

There can therefore be no debate on whether India is doing enough to meet its climate commitments.

However, the conversation must now pivot to the cost of financing new renewable energy (RE) capacity. This is pertinent because in August, the Solar Energy Corporation of India (SECI) awarded about 1GW of new RE capacity under its round-the-clock thermal-mimic tenders. The projects will combine solar, wind and energy storage to supply power on a coal plant's schedule, with at least 90% of the contracted capacity made available through at least six evening-to-morning peak hours. Most importantly, the winning tariffs were ₹5.25-5.26 per kWh (over 25 years), making them cheaper than new coal contracts signed in 2025, which ranged from ₹5.38-6.30 per kWh. The latter's fuel costs are vulnerable to external shocks as well.

Given that India's power capacity is also projected to double by 2035, and it is seeking ways to minimize its carbon footprint, investors at COP31 should ask: what advantages does the Indian market offer, and what are the gaps that would benefit from access to international funding?

The capital spent

Until now, 83% of the capital invested in India's energy transition has been domestic. Today, around 18% of the country's power produced comes from round-the-clock renewables and nuclear power. More than 150GW of new RE capacity is under construction, nearly 50GW is to be tendered out every year till 2030, and around 90GWh of battery storage capacity has been awarded. Scaling up firm, clean energy to supply as much as 80% of India's power consumption will require an enormous expansion.

However, since clean power projects are capital-heavy, the rate of interest largely determines their tariffs. The International Energy Agency estimates the cost of capital for solar at 2.6%-5% in Europe and the US, against 8.8-10% in India. Similarly, the International Renewable Energy Agency puts it at 1.12.4% in Germany and 5.4% in North America, against more than 7% in India. The gap is stark since investors tend to price in currency, policy certainty, power offtake and construction risk. But this is where India makes a strong case for itself.

For instance, Indian RE projects have typically been bid at equity returns of around 12% and are backed by 25-year power purchase agreements with credible agencies such as SECI and NTPC. Few large markets offer this combination of demand, yield and contract duration.

From pledges to delivery mechanisms

COP31 can make a real difference to augmenting clean energy capacity in the developing world. The negotiators would do well to focus on instruments that lower the price of risk in emerging markets, with measures such as sovereign guarantees for foreign commercial lending, and blended finance tied to credible, implementable national transition plans.

Sovereign guarantees, in particular, cost developed countries little unless they are called, and India's record suggests they rarely will be. They also invite international financiers to look beyond credit ratings to evidence of delivery: how closely targets were met, whether the market enjoys friendly policies, the consistency of tenders, and tariff competitiveness. On every measure, India has performed admirably.

Invest in the gaps

A noticeable investment opportunity lies in enhancing India's transmission network. By May this year, about a third of recently commissioned RE capacity was running on temporary grid access, thereby losing, at times, more than half of the solar output. To integrate 500GW of non-fossil capacity by 2030, the country must add roughly 20,000 circuit-km of lines and 120 GVA (gigavolt-ampere) of substation capacity every year. But with regulated returns and long asset lives, a modernized transmission network would be exactly the low-risk, long-tenure asset that risk-averse investors should look for.

The RE supply chain also opens new avenues. India currently manufactures over 200GW of solar modules a year, but nearly all its wafers and polysilicon are imported, and the government is targeting 80GW of domestic ingot and wafer capacity by 2028. Since an integrated polysilicon-to-cell plant costs about $200-400 million per GW, investing in it would not only boost India's domestic supply chain and help it comply better with CBAM-style regulations, but also help developed economies diversify away from single-source dependence.

CBAM is short for the Carbon Border Adjustment Mechanism, an environmental policy tool introduced by the European Union to put a fair carbon price on carbon-intensive goods imported into the bloc.

The bargain at Antalya

India operates a strong clean energy market that is increasingly the more affordable pathway. The task at Antalya would thus be to turn this proof into a bargain: if the world wants developing countries to move faster, it must lower the price of doing so. Given India's fundamentals, COP31 should be the conclave where this graduates from an argument to a mechanism.

Dr Ajay Mathur is a former director general of the International Solar Alliance and India's lead negotiator at the Paris COP.