Catalysing climate finance for low-carbon construction: Insights from industry leaders

A future-focused exchange unfolded in New Delhi last month as Build Ahead and Climate Bonds Initiative convened industry pioneers to explore innovative financing pathways for sustainable urban development. The discussions revealed promising opportunities to accelerate sustainable practices across India’s real estate sector, from enhancing green building standards to creating new mechanisms for accessing concessional capital, setting the stage for transformative change in urban development.

India’s urban landscape is transforming at an unprecedented pace, with the construction sector playing a pivotal role in shaping the country’s sustainable future. As the industry moves towards its net-zero ambitions for 2070, the intersection of climate finance and low-carbon construction presents enormous opportunities for innovation and value creation. Against this backdrop, Build Ahead and Climate Bonds Initiative convened a strategic roundtable, bringing together visionary leaders across real estate development, asset management, banking, development financial institutions (DFIs), certification bodies, and sustainability experts to chart the future of low-carbon construction.

Unlocking concessional finance opportunities

The discussions revealed strong market momentum toward green financing solutions, with developers actively seeking pathways to access concessional capital. While banks and DFIs showed keen interest in collaborating on theme-based financing initiatives, new frameworks are needed to bridge scale considerations in India’s diverse real estate sector.

A valuable insight emerged around green certification systems, as developers and financial institutions explored opportunities to enhance current frameworks. Financial institutions emphasised their commitment to established certification systems, while developers offered perspectives on strengthening these frameworks to better reflect net-zero achievements.

Building compelling business cases

The dialogue illuminated opportunities to strengthen the business case for low-carbon construction. Industry leaders identified the transformative potential of establishing clear baselines and benchmarks to accelerate low-carbon design and construction practices. This would enable stakeholders to effectively measure and showcase environmental improvements.

Developers shared valuable insights about incentive structures that could catalyse the transition toward low-carbon construction methods. Enhanced transparency in product and material emissions data emerged as another opportunity area, enabling more informed decision-making about sustainable alternatives.

^{Roundtable attendees included: ADB, AEON, Birla Estates, BPTP Developers, CII – IGBC, Climate Bonds Initiative, Coevolve, Development Solutions Inc, GiZ, IFC, IFC Edge, Indicc, IndusInd Bank, JLL, MOEFCC, Proparco, RICS,  Saint Gobain, SBI Caps, SED,  Signature Global and Smarter Dharma.}

Forging collaborative pathways

The roundtable sparked dynamic discussions about collaborative approaches to green finance deployment. Industry leaders explored opportunities to harmonise rating standards, creating greater clarity and consistency in the market. 

An important insight emerged regarding concessional capital accessibility. While most DFIs currently offer private sector lending at commercial rates, participants identified opportunities to create new mechanisms for channelling concessional finance to sustainable construction initiatives. The discussions highlighted promising pathways to map and unlock sources of concessional capital for private sector projects.

Participants also explored frameworks for establishing ‘additionality’ in real estate projects – demonstrating enhanced environmental benefits that could unlock concessional finance from DFIs.

While most DFIs currently offer private sector lending at commercial rates, participants identified opportunities to create new mechanisms for channelling concessional finance to sustainable construction initiatives.

Accelerating progress through partnership

The roundtable spotlighted several promising opportunity areas:

1. Enhanced green building certification frameworks that capture net-zero achievements
2. Development of industry-wide baselines for low-carbon construction
3. Establishing the case for ‘additionality’ in construction to low-cost climate finance
4. Enhanced existing banking systems to deploy climate finance products in construction
5. Harmonised sustainability standards across the industry
6. Advanced mechanisms for construction materials emissions transparency

The discussions showcased growing momentum toward sustainable construction practices, with financial institutions demonstrating readiness to collaborate on theme-based initiatives – creating a strong foundation for future progress.

This gathering reinforced how successful decarbonisation of India’s construction sector can be accelerated through collaborative innovation between developers, financial institutions, certification bodies, and policymakers. The strong engagement from all stakeholders highlighted the tremendous opportunities in sustainable construction.

Moving forward, Build Ahead and Climate Bonds Initiative will continue fostering dialogue between stakeholders and developing practical solutions for capturing these opportunities. The insights gathered will shape future initiatives to accelerate sustainable construction practices across India.

This milestone gathering marks an important step in India’s journey toward sustainable urban development, illuminating powerful opportunities in financing low-carbon construction. As the sector evolves, such collaborative platforms will be crucial in shaping effective solutions for a sustainable built environment.

If you would like to get in touch about any of the points raised in this piece, or discuss how Xynteo can help your organisation, contact Suman below.

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