International Financial Service Centre Authority recently released its report on Transition Finance which focus on finance requirement for transitioning towards achieving net-zero target as agreed during Paris climate summit and sustainable future. The Paris Agreement calls for making finance flows consistent with pathways towards low greenhouse gas emissions. To achieve this, a directed and simultaneously inclusive approach is necessary for financing the global low-carbon economic transition, that also addresses the concerns of Emerging Markets and Developing Economies (EMDEs).

Public capital alone is not sufficient to meet the demand for financing the transition in industrial sectors and much larger sources of private capital must step in. Mobilization of capital, both domestic and international, is needed. International Financial Services Centres (IFSCs), therefore, have an integral role to play since they can be the conduits for international capital to flow. Recommendations include Taxonomy compliance for transition finance, Tax Incentives, External Commercial Borrowings (ECB) in Automatic Route, Encourage setting up of Green FinTech in the GIFT-IFSC, Blended Finance Mechanisms, Enhanced disclosures etc.

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