The Crossbill News Desk
Despite mounting climate risks and growing global calls to curb fossil fuel use, Indian banks have continued to pour billions into coal projects, according to a recent report by Climate Risk Horizons, a Bengaluru-based think tank.
Between 2016 and 2023, major banks including the State Bank of India and ICICI Bank collectively financed around $29 billion (approximately Rs 2,900 crore) in coal ventures, through both direct loans and underwriting services.
The report, released on June 25, highlights how this financial backing for coal runs counter to India’s climate commitments and the urgent need for a clean energy transition.
Of the total funding, about $15.2 billion was extended as loans while $13.5 billion came through underwriting, a financial process that reduces investment risk and effectively facilitates continued coal financing. Authors of the report warned that underwriting is increasingly being used as a "backdoor" method to prop up the coal industry.
India accounted for roughly 2.3% of global coal financing between 2021 and 2023, making it one of the top seven countries in the world supporting coal projects financially. Public sector banks were responsible for about 75% of the coal lending, while private banks handled 83% of the underwriting, the report said.
Leading financial institutions such as SBI, Axis Bank, and ICICI Bank were named among the top funders, while only a few — including Federal Bank, RBL Bank, and Suryoday Small Finance Bank — have implemented coal exclusion policies.
This continued financing comes despite clear economic and environmental risks. Coal power now costs about Rs 4.39 per kWh compared to Rs 2-3 per kWh for solar power, and faces increasing regulatory and public scrutiny. Investors too have suffered; Indian and international firms like HDFC Mutual Fund and ICICI Prudential reportedly lost $3 billion between 2016 and 2020 due to underperforming coal stocks.
The report urged Indian banks to adopt formal coal phase-out strategies and redirect financial flows toward renewable sectors such as solar and wind power, battery storage, and grid-scale energy infrastructure.
Without this shift, the report cautioned, banks risk contributing to financial instability and missing out on long-term opportunities in clean energy.
India’s latest climate pledges under its Nationally Determined Contributions (NDCs), submitted in August 2022, include a commitment to reduce the emissions intensity of its GDP by 45% from 2005 levels by 2030, and to achieve 50% cumulative electric power from non-fossil sources by the same year.
However, analysts warn that such goals remain in jeopardy unless financing patterns are urgently aligned with clean energy targets.
Between 2016 and 2023, major banks including the State Bank of India and ICICI Bank collectively financed around $29 billion (approximately Rs 2,900 crore) in coal ventures, through both direct loans and underwriting services.
The report, released on June 25, highlights how this financial backing for coal runs counter to India’s climate commitments and the urgent need for a clean energy transition.
Of the total funding, about $15.2 billion was extended as loans while $13.5 billion came through underwriting, a financial process that reduces investment risk and effectively facilitates continued coal financing. Authors of the report warned that underwriting is increasingly being used as a "backdoor" method to prop up the coal industry.
India accounted for roughly 2.3% of global coal financing between 2021 and 2023, making it one of the top seven countries in the world supporting coal projects financially. Public sector banks were responsible for about 75% of the coal lending, while private banks handled 83% of the underwriting, the report said.
Leading financial institutions such as SBI, Axis Bank, and ICICI Bank were named among the top funders, while only a few — including Federal Bank, RBL Bank, and Suryoday Small Finance Bank — have implemented coal exclusion policies.
This continued financing comes despite clear economic and environmental risks. Coal power now costs about Rs 4.39 per kWh compared to Rs 2-3 per kWh for solar power, and faces increasing regulatory and public scrutiny. Investors too have suffered; Indian and international firms like HDFC Mutual Fund and ICICI Prudential reportedly lost $3 billion between 2016 and 2020 due to underperforming coal stocks.
The report urged Indian banks to adopt formal coal phase-out strategies and redirect financial flows toward renewable sectors such as solar and wind power, battery storage, and grid-scale energy infrastructure.
Without this shift, the report cautioned, banks risk contributing to financial instability and missing out on long-term opportunities in clean energy.
India’s latest climate pledges under its Nationally Determined Contributions (NDCs), submitted in August 2022, include a commitment to reduce the emissions intensity of its GDP by 45% from 2005 levels by 2030, and to achieve 50% cumulative electric power from non-fossil sources by the same year.
However, analysts warn that such goals remain in jeopardy unless financing patterns are urgently aligned with clean energy targets.
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