SBI Ventures, the investment management arm backed by the State Bank of India, is preparing to roll out a ₹2,000-crore fund dedicated to early- and growth-stage climate-tech startups. The announcement was made at the IVCA Green Returns Summit, with the fund expected to debut in the January–March quarter next year.
Focus Areas for Investment
The new fund will channel capital into emerging climate-focused sectors, including:
- Sustainable cooling technologies
- Low-carbon and green materials
- Waste management and circular economy solutions
- Nature-based climate innovations
- AI-driven climate-tech applications
These domains are still maturing and need substantial financial backing to develop commercially viable large-scale solutions.
Global and Domestic Investors to Be Approached
SBI Ventures aims to build the fund through contributions from both Indian and international investors. Formal outreach will begin with investor roadshows early next year. This will be the firm’s third climate-focused investment vehicle, following earlier funds that supported startups working on sustainability and energy transition solutions.
India’s Climate Finance Gap
At the summit, the firm highlighted the significant financing gap in India’s climate transition pathway. The country requires nearly $170 billion annually to meet its climate objectives, yet current flows cover only about a third of that need. The most underfunded segments include:
- Water security
- Climate-resilient agriculture
- Infrastructure built to withstand extreme weather and climate risks
Call for Diverse and Blended Capital
SBI Ventures emphasised that climate finance must extend beyond traditional equity investment. It called for a blend of concessional capital, philanthropic funding, carbon market mechanisms, and climate-resilience bonds to help de-risk new technologies and attract long-term investors. Such blended structures are seen as crucial for scaling early-stage climate solutions.
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