New Delhi, March 10 -- India's ambitious target of achieving 500 GW of renewable energy by 2030 demands an infusion of roughly Rs 33 lakh crore, yet there is a significant financing gap in the sector. To tackle this, policymakers are considering the Renewable Energy Financing Obligation (REFO), a bold mechanism designed to ensure that financial institutions channel a fixed portion of their lending portfolios to renewable energy projects.

By mobilising dormant capital and de-risking investments, REFO could accelerate the nation's clean energy transition. It builds on the framework of India's Renewable Purchase Obligations but shifts the focus from mandating power procurement to securing dedicated financing. Under this mechanism, banks, no...