VC, PE Drive India’s $13.6 Bn Green Investment Surge: EY Insights

India’s green investment has seen a sharp increase and is evolving rapidly. From 2017 to 2024, deal volume increased from 134 to 230, with total deal value peaking at $13.6 billion in 2023, driven by strong investor interest, according to EY’s Energy transition investment trends report.

It is also showed that the venture capital (VC) led investment deals at 40%, while private equity (PE) accounted for 22%, focusing on capital-intensive sectors. India's green investment landscape is growing, supported by ambitious net-zero targets and government initiatives, positioning the country as a key hub for climate-related funding.

When it comes to investment trends, it showed a significant shift from renewables to e-mobility, with e-mobility investments rising from 6% in 2017 to 49% in 2024, energy storage investments rising from 1% to 9%, while energy efficiency investments fluctuated around 4%. Emerging technologies like the circular economy and low carbon fuels also received attention, though CCUS investments remain in early stages due to high costs.

The insights said that the investment trends over the period highlight dominance of product/equipment investments, peaking at $4.2 billion in 2024, primarily in solar, wind, and energy storage followed by developer investments which declined from 30% in 2017 to 15% in 2024, while services sector has grown, reaching $2.6 billion in 2023. Software investments and financing deals witnessed sluggish growth from 4% to 6% and 2% to 5% respectively in line with the needs to meet the climate goals.

Green energy investments highlighted consumer-driven investments across value chain which rose from 18% in 2017 to 45% in 2024, particularly in electric vehicles and green technologies while energy generation and production attracted the highest investments, peaking at $9.1 billion in 2023, while energy transportation/storage investments grew significantly, reflecting a robust demand for sustainable solutions despite a moderation in total deal values in 2024.