May 2026 | 1476 words | 6-minute read
Tata Capital powers India's green startup ecosystem
A fundamental shift is occurring in climate finance, with record investments flowing into large-scale renewable infrastructure, yet early-stage climate technologies and startups remain underfunded, particularly in India. Tata Capital, through its BEACON INDIA programme and partnership with the Green Climate Fund, addresses this gap by deploying a blended, revolving capital model to support both mitigation and adaptation innovations. This approach aims to strengthen India’s domestic climate tech ecosystem, reduce import dependence, and catalyze further private investment. With over 500 projects financed, Tata Capital’s strategy is to mainstream climate finance, crowd in additional capital, and help achieve India’s ambitious energy goals.
Tata Capital powers India's green startup ecosystem
A critical shift is occurring in climate finance, with global investment in energy transition reaching $2.3 trillion in 2025, mostly directed at large-scale renewable infrastructure. In India, 83% of power sector investment in 2024 went to clean energy, but funding remains heavily skewed toward proven, asset-heavy projects rather than early-stage climate technologies and startups. Globally, climate tech startups raised only $40.5 billion in 2025, highlighting a persistent gap between infrastructure deployment and technology development.
In India, core technologies are often imported, reflecting limited domestic innovation support, as lenders prefer predictable cash flows and venture capitalists seek quick returns.
Tata Capital, building on a decade of cleantech finance experience, is addressing this gap through the BEACON INDIA programme, a blended finance model leveraging Green Climate Fund (GCF) capital. This innovative revolving capital pool redeploys funds into multiple startup cycles, aiming to catalyse climate innovation across mitigation and adaptation technologies. The programme expects to avoid 1.1 million tonnes of CO2 emissions and positively impact 2.9 million people, strengthening India’s domestic green tech ecosystem. Tata Capital’s track record includes financing 500+ projects, supporting 21GW+ renewable capacity, and sustaining a 3% return on assets, demonstrating commercial viability.
Its broader strategy is to crowd in more capital, encouraging wider financial ecosystem participation. As India pursues ambitious energy targets, Tata Capital aims to integrate sustainability across its lending portfolio, helping mainstream emerging climate technologies and build a cohesive financial architecture for scalable climate innovation.
Tata Capital powers India's green startup ecosystem
Global investment in the energy transition is accelerating rapidly, reaching $2.3 trillion in 2025, with India mirroring this momentum as most power-sector investment flows into clean energy. However, this capital is predominantly directed toward large-scale infrastructure such as solar parks, wind farms and grid systems. While these projects are essential, they are only the visible layer of a deeper innovation ecosystem. The technologies, startups and systems that enable decarbonisation remain significantly underfunded, creating a structural imbalance in climate finance.
In India, and globally, early-stage climate technologies face a persistent financing gap. Traditional lenders favour established, low-risk projects with predictable returns, while venture capital tends to prioritise faster-scaling digital sectors. As a result, innovations requiring long development cycles—testing, pilots and regulatory approvals—struggle to access funding. This has led to a reliance on imported technologies, reflecting limited domestic investment and confidence in homegrown solutions.
To address this gap, Tata Capital, in partnership with the Green Climate Fund (GCF), has launched the BEACON INDIA programme. This initiative introduces a blended finance model designed to catalyse investment in early-stage climate technologies. By combining concessional capital from GCF with Tata Capital’s own funding, the programme aims to unlock financing for startups that would otherwise find it difficult to secure support. This approach is critical as India pursues ambitious climate targets, including 500 GW of non-fossil fuel capacity by 2030 and net zero emissions by 2070.
A distinguishing feature of BEACON INDIA is its revolving capital structure. Unlike traditional funding models where capital exits after a project cycle, this system reinvests repaid funds into new ventures over a 15-year period. This creates a self-sustaining financing pool, enabling multiple cycles of investment and amplifying the impact of the initial capital. The programme brings together key partners: SIDBI as the accredited channel for GCF funds, and an incubation partner that supports early-stage innovators in developing prototypes and pilot projects.
The initiative targets both climate mitigation and adaptation technologies. While mitigation solutions—such as renewable energy and electric mobility—are relatively established, adaptation technologies like water management and climate-resilient agriculture remain underserved. By supporting both areas, the programme aims to foster solutions tailored to India’s unique climate challenges, while also delivering broader benefits such as reduced emissions, improved resilience and stronger domestic manufacturing capabilities.
Beyond funding startups, Tata Capital’s broader strategy is to act as a catalyst for the financial ecosystem. By demonstrating the commercial viability of emerging sectors, it aims to attract additional investors and lenders, replicating successes seen in rooftop solar and electric mobility. This “crowding in” effect is vital, especially as India’s climate investment needs are projected to increase tenfold in the coming years.
Tata Capital’s efforts build on a strong foundation in cleantech finance, with over 500 projects financed and more than 21 GW of renewable capacity supported. Its longstanding experience, combined with robust risk management and ESG integration, has helped mainstream several high-risk sectors.
Ultimately, the company’s vision extends beyond individual investments. It seeks to build a comprehensive financial architecture that connects global capital, domestic innovation and emerging technologies—transforming climate finance from a niche segment into a central pillar of India’s economic and environmental future.
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On the frontlines of the global climate revolution, a quiet but critical shift is underway — not in power plants or solar parks, but in the financial architecture that supports them.
Global investment in energy transition hit a record $2.3tn in 2025, up 8% from 2024, with most funding flowing into renewable power generation, grids and storage infrastructure, according to BloombergNEF. India mirrors this trend: in 2024, 83% of power sector investment went to clean energy initiatives. Yet, climate finance remains heavily skewed towards large, asset-heavy infrastructure projects — solar parks, wind farms, and grid upgrades that can deploy capital at scale.
What sits behind these gigawatt-scale projects is a deeper layer of innovation — the technologies, systems, and startups that make decarbonisation possible. “The bulk of climate finance in India is going into project deployment,” says Manish Chourasia, Chief Operating Officer, Corporate and Cleantech Finance, Tata Capital. “But the technologies that enable those projects, the innovations, are not receiving the same level of support.”
This imbalance is present globally. Sightline Climate reports climate tech startups globally raising only ~$40.5bn in 2025, underscoring the persistent gap between large-scale infrastructure deployment and the early-stage technology development needed to sustain it. In India, this gap is even more pronounced: core technologies powering these projects are often imported, reflecting limited confidence — and capital — directed towards domestic innovation.
Developing climate technologies requires years of experimentation, pilot projects, and regulatory approvals before reaching commercial viability. Traditional lenders prefer proven technologies, with predictable cash flows, while venture capitalists often prioritise faster-return digital businesses. The result? A financing gap for innovations critical to India’s long-term climate transition.
A solid foundation
Tata Capital’s climate financing journey began through Tata Cleantech Capital, a joint venture with the International Finance Corporation (IFC), the World Bank’s private-sector arm. Established in 2013 and having scaled up since 2015, it was India’s first private sector financial institution focused exclusively on green finance; it was merged into Tata Capital in 2024.
Over time, Tata Capital has helped mainstream several cleantech segments that were once considered high-risk. It has backed projects in rooftop solar, corporate open-access renewables, electric mobility infrastructure, compressed biogas, energy efficiency, and water treatment — sectors that now anchor India’s energy transition.
This early-mover approach has enabled Tata Capital to build both technical expertise and institutional confidence in emerging technologies. By developing specialised research capabilities and integrating environmental, social, and governance (ESG) assessment into its project evaluation processes, Tata Capital has created a framework for financing complex climate projects while maintaining robust risk management.
The approach has yielded strong results: despite the inherent risks of emerging technologies, the company has financed 500+ projects across India while maintaining what it describes as ‘pristine asset quality’— reflected in a AAA credit rating from all major Indian credit rating agencies. More importantly, these investments have helped build entire markets across multiple climate‑aligned sectors.
A beacon of hope
This exigency has prompted Tata Capital to step in, leveraging more than a decade of experience in climate finance and a pioneering partnership with the Green Climate Fund (GCF) to catalyse India’s emerging climate tech ecosystem. “Through the BEACON INDIA programme, Tata Capital is introducing a blended finance model designed to unlock capital for climate-focused startups and technologies that have traditionally struggled to access funding,” says Mr Chourasia.
Bridging this gap is critical for India as it pursues one of the world’s most ambitious energy transition targets — 500GW of non-fossil fuel electricity capacity by 2030, ~50% of installed electric power capacity from nonfossil sources by 2030, and net zero emissions by 2070. This makes the need to support early-stage climate innovation increasingly urgent.
Revolving engine for innovation
Tata Capital’s entry into the climate innovation space is rooted in more than a decade of experience in climate tech financing. That foundation now underpins its participation in the BEACON INDIA programme, a collaborative effort, announced earlier this year, that brings together multiple players from across the ecosystem. The Small Industries Development Bank of India (SIDBI) acts as the accredited entity through which GCF capital is channelled, while the incubation partner, Tiruchi Regional Engineering College – Science and Technology Entrepreneurs’ Park, works closely with early-stage innovators to develop pilot projects and technical prototypes.
At the core of the programme is a blended financing pool that combines concessional capital from GCF with Tata Capital’s own investments. Unlike traditional funding structures, this facility is built around an innovative revolving capital model.
Green Climate Fund
The world’s largest multilateral climate finance mechanism, GCF, was established under the United Nations Framework Convention on Climate Change in 2010. It was tasked by the Paris Agreement to channel funding from developed to developing countries.
With a portfolio exceeding $19bn across more than 300 projects in 130+ countries, GCF supports initiatives aimed at both reducing emissions and strengthening climate resilience.
Instead of being returned to the funding source at the end of each project cycle, the capital is continuously redeployed into new ventures over a defined implementation period. As loans are repaid, the funds are reinvested into additional startups, multiplying the reach and impact of the original capital infusion. This approach creates a self-sustaining pool that can support multiple waves of climate innovation while amplifying impact.
From capital to catalyst
The BEACON INDIA programme aims to support startups working on technologies across climate mitigation and climate adaptation. Mitigation solutions, such as renewable energy systems, electric mobility technologies, and energy efficiency innovations, help reduce greenhouse gas emissions. Adaptation solutions focus on helping communities and infrastructure cope with the inevitable impacts of climate change. These include technologies for water conservation, climate-resilient agriculture, and resource-efficient infrastructure.
“Mitigation is relatively well understood today,” says Mr Chourasia. “But adaptation technologies — such as water management or climate resilience solutions — remain largely underserved.”
BEACON INDIA’s funding structure
- $15.85mn revolving infusion from the Green Climate Fund
- $3mn additional from GCF grant to reduce the cost of financing for startups
- $47.6mn committed by Tata Capital
- Capital redeployed through multiple cycles over the programme period of 15 years
By financing projects across both categories, the programme aims to nurture innovations that address India’s unique climate challenges. The expected outcomes are significant, and beyond direct environmental benefits. The programme could strengthen India’s domestic green tech ecosystem, reducing reliance on imports, while encouraging local manufacturing and innovation.
Expected impact
- 1.1mn tonnes of CO₂ emissions avoided
- ~2.9 mn people positively impacted
- Strengthening India’s climate innovation ecosystem
Seeding markets, scaling investments
Beyond funding individual startups, Tata Capital’s broader objective is to influence greater participation from the financial ecosystem. Once an emerging sector demonstrates viability, other lenders and investors quickly follow. Tata Capital has seen this pattern repeatedly in segments such as rooftop solar and electric mobility, where early financing helped unlock broader market participation. “If we succeed, others will come in,” says Mr Chourasia. “The goal is always to crowd in more capital into the ecosystem.”
This catalytic effect is crucial, given the scale of India’s energy transition demands. Estimates indicate that climate investment must rise 10X over the next seven years, compared to the previous seven, to meet decarbonisation targets. Given this scale, public-sector financing alone will not suffice — making private capital critical.
Track record
The scale of Tata Capital’s engagement in cleantech finance underscores its long-term commitment to the sector.
- 500+ cleantech projects financed across India
- 21GW+ renewable energy capacity supported
- Rs 350bn+ in cleantech disbursements (as of December 2024)
- ~3% return on assets sustained over six years, demonstrating the commercial viability of climate finance
Investment sectors: Electric mobility, rooftop solar, energy efficiency, waste-to-biogas, green hydrogen, green ammonia, biofuels, and water treatment
Niche finance to core strategy
Tata Capital plans to deepen its collaboration with international climate investors and development finance institutions — partnerships that will become increasingly important as India accelerates its energy transition — to expand its green capital pool. The company sees climate finance evolving from a specialised niche into a core pillar of financial services and is exploring ways to integrate sustainability across its broader lending portfolio. This includes supporting greener transitions across supply chains, distribution networks and businesses. Financing renewable energy adoption among corporate suppliers, supporting energy efficiency improvements, and enabling climate-friendly infrastructure investments across sectors, are some of the avenues that the company is exploring.
“The objective is to help bring emerging climate technologies into the mainstream,” says Mr Chourasia. “Once these innovations prove viable, the ecosystem will naturally expand around them.”
For Tata Capital, the ambition goes beyond financing individual projects. It lies in helping build the financial architecture that allows climate innovation to scale — connecting global capital, domestic entrepreneurs and emerging technologies into a cohesive ecosystem.
— Anuradha Anupkumar
