Climate finance should focus on rural sector, says leading Indian lender

The entrepreneurial hero of India’s climate response will more likely be wearing farming clothes than a business suit, said a leading representative of India’s major rural development bank at the start of a key Green Climate Fund workshop.

“India’s rural, private sector has a central role in the country’s approach to climate finance,” said HR Dave, Deputy Managing Director of India’s National Bank for Agriculture and Rural Development (NABARD).

“The importance of boosting farmers’ ability to borrow money and encouraging the banking system to support agricultural investments at the farmers’ level is essential to solving the climate challenge in India. When banks loan money to farmers, it is the farmers who become the entrepreneurs.”

Mr Dave made the comments at the start of a three-day workshop designed to strengthen GCF’s partnerships with its direct access Accredited Entities.

Addressing climate finance priorities in developing countries, Mr Dave emphasized the importance of national leadership and support for the private sector which drills down to the grassroots level.

“We need to tap the private sector - given the size of India, and the multiple solutions needed to deal with climate change, both in adaptation and mitigation.”

“While civil society organisations can play a catalytic role, the climate agenda has to become part of the DNA of the society,” Mr Dave added, citing the climate imperatives in India as including the need to spread the use of renewable energy and climate-smart agriculture to the village level.

The issue of climate change has come into increasing prominence at NABARD since it was formed in 1982 to promote sustainable and equitable agriculture by extending credit to India’s farmers.

India’s development bank, NABARD, which already has one GCF-approved project, is one of the Fund’s stable of direct access Accredited Entities.

These are organizations based in developing countries nominated by national governments that develop funding proposals, and then oversee, supervise, manage and monitor those that GCF approves. Of the Fund’s 48 Accredited Entities, 23 are direct access.

The “Empowering Direct Access workshop” is a major highlight for GCF this year. Along with direct access Accredited Entities, it brings together GCF’s National Designated Authorities (NDAs) and Readiness delivery partners to strengthen their capacities in accessing GCF resources.

Starting today at GCF Headquarters in Korea, the workshop provides a forum for GCF Partners to share their climate finance ideas and experiences.