Many governments around the world have expressed a desire to achieve net zero emissions to a time scale that varies by the size of their economies, level of industrialization, and, of course, prevailing domestic political climate. However, most agree that it’s going to cost. But just how much, and how to bridge that energy transition investment gap?
These vexing questions came to the fore at the India Energy Week 2025, a flagship global event being held at the Yashobhoomi Convention Centre, in the Indian capital city of New Delhi from February 11 to 14.
There is widespread acknowledgement that most nations are targeting 2050 as the year they hope to achieve net zero. That would mean investments in renewable energy and clean technologies would have to more than double from a $1.8 trillion in 2023 to $4 trillion by the end of this decade, according to the World Economic Forum.
Both the figure as well as the financial structures needed to get there appear challenging, according to delegates at the event in India.
Speaking on a leadership panel session on Wednesday, titled “Bridging the energy transition’s investment gaps,” Roberto Bocca, head of the Centre for Energy and Materials, WEF, said two-thirds of the world’s population currently lives either in developing or emerging nations, but these markets receive only 15% of the planet’s renewable energy investment.
“So most of the demand in future for funding will be from these economies,” he added.
However, some emerging economic powerhouses, for instance India — tipped by many to be the world’s third-largest economy by 2030 — can forge ahead with both attracting, as well as facilitating, much higher levels of investment relative to their peers. Albeit not without challenges either.
Bhupinder Singh Bhalla, a veteran Indian official and former secretary of the country’s Ministry of New and Renewable Energy, said India likely requires $400 billion by 2030 just for its ambition of achieving the country’s 500 gigawatt renewable energy target.
“This may be manageable. But unless there is enough equity, enough financing of debt or other sources, we perhaps won’t be able to achieve the target,” Bhalla added.
For its part, India has set a net zero target of 2070. To make it happen, the country’s government is working overtime on its policy framework and actively courting foreign direct investment alongside domestic private capital. But that’s India, an economy deemed attractive by investors given its high growth potential.
Others may not carry the same amount of attraction or have wide ranging conducive policies courting green investment, warned Katan Hirachand, chief executive and chief country officer for India at Société Générale, a French investment bank.
“You have to admit that in the quest for green finance there will be investment ‘haves’ and ‘have-nots.’ Ultimately, bridging the gap will depend on how countries mobilize and harness different forms of capital. And I cannot stress enough on this — keep their citizens onboard by not losing sight of affordability in their pursuit of net zero.”
When it comes to transition economics, affordability, along with investment potential and viability, are factors few proponents of the energy transition can lose sight of, if they wish to be taken seriously when raising capital, said Hitesh Vaid, CFO of Cairn Oil & Gas.
“Money will be available when there is a return on investment. And those ROI parameters of finance providers will be ensured when the energy being provided is considered affordable for consumers. That’s the stark equation.”