Sustainable Finance in Infrastructure Projects in India: Challenges and Future Ahead

Volume 11, Issue 3, 2026

International Journal of Commerce and Management Studies, ISSN 2456-3684

Paper Title

Author Name and Affiliation

Mithun H
Management Student
NICMAR University of Construction Studies, Hyderabad
Email: H2550021@student.nicmar.ac.in

Abstract

India’s infrastructure transition requires financing mechanisms capable of addressing long project lives, high upfront capital requirements, climate risks and environmental and social objectives. This study examines the use of sustainable-finance instruments and institutional mechanisms for infrastructure financing in India and identifies barriers to their scale and effectiveness. Using a descriptive and analytical research design based exclusively on secondary sources published or available between 2017 and 31 July 2026, the study analyses green bonds, sovereign green bonds, ESG debt securities, green deposits, blended finance and development-finance mechanisms. The evidence indicates that sustainable-finance instruments have expanded, including cumulative green debt issuances of ₹21,678.59 crore recorded by SEBI as of 31 July 2026 and ₹16,000 crore of sovereign green bonds issued in 2023. However, project bankability, long-tenor financing, risk allocation, disclosure, verification and institutional capacity remain significant constraints. The study develops an integrated infrastructure-focused framework linking instrument evolution with project-level financing constraints and institutional responses.

Keywords

Sustainable finance, infrastructure finance, green bonds, sovereign green bonds, ESG debt securities, green deposits, blended finance, climate finance, India

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DOI

DOI: https://doi.org/10.67061/ijcams.2026.vol.11.issue.03.8129

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