The World Bank has revised its climate action strategy, removing a crucial funding target, while India advances its domestic green bond market and climate institutions, signalling a shift towards national-led climate resilience.
The World Bank has extended its Climate Change Action Plan but dropped the 45% climate finance target that had become one of the centrepiece pledges of Ajay Banga’s presidency. According to a June 29 statement from the bank, the new approach will focus on client-driven climate action tied to national plans and emissions commitments, while the Independent Evaluation Group reviews the programme. The World Resources Institute said the decision came despite resistance from nearly 100 developing countries and was driven by a small group of shareholders, including the United States, Russia and Saudi Arabia.
For India, the shift underscores a strategy that has been taking shape for years: build climate finance capacity at home rather than depend on multilateral promises alone. New Delhi issued its first sovereign green bonds in January 2023, raising ₹80 billion in the opening tranche before completing a second sale a month later. The Department of Economic Affairs later reported that the government issued ₹20,000 crore in sovereign green bonds in 2023-24, including a first-ever 30-year tenor, while Moneycontrol said borrowing through the programme had reached only 8.5% of the 2024-25 budget target by late November 2024.
That domestic market matters because it has helped create a pricing benchmark for other issuers. India’s broader sustainable debt market had reached $55.9 billion by the end of 2024, according to the figures cited in the lead article, making the country the fourth-largest emerging-market issuer of green, social and sustainability-linked debt after China, South Korea and Chile. In practical terms, that means climate-linked borrowing is no longer confined to a handful of multilateral channels.
The same logic runs through India’s international climate architecture. The International Solar Alliance, launched by India and France at COP21 in 2015 and based in Gurugram, has grown to more than 120 member and signatory countries. The United States withdrew from the alliance in January 2026, but the institution remained in place, alongside the Global Solar Facility, STAR-C centres, the Solar Fellowship and other India-backed programmes aimed at lowering financing costs and spreading solar know-how across the developing world.
India’s domestic transition has also gathered pace. The lead article said non-fossil sources now account for 50% of installed electricity capacity, five years ahead of the 2030 goal, while solar manufacturing capacity has risen from 2.3 GW in 2014 to 88 GW in 2025. That progress has been supported by a mix of sovereign borrowing, industrial incentives and international partnerships rather than by World Bank targets alone.
The larger lesson is not that multilateral climate finance no longer matters. Smaller, climate-vulnerable economies still rely heavily on concessional lending and will feel the loss of a hard lending target. But India has spent the past decade assembling parallel institutions, domestic financing tools and exportable policy models that reduce its exposure to shifts in Washington. In a year when the World Bank has stepped back from counting climate lending separately, that looks less like happenstance than preparation.
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