DH Interview | 'Green bonds & sustainability-linked loans reshaping urban growth financing'

With a young population, fast-growing cities, and clear national commitments on climate, the conditions for large-scale progress of sustainable finance in India is highly promising

India’s experience shows that sustainable finance is not only about mobilising capital but about changing how value is understood. When financial products reward efficiency, transparency, and long-term impact, they build confidence among investors and generate real economic benefits for communities. DH’s Mrityunjay Bose spoke to Aidee Olmo, principal, Sustainable Finance, US Green Building Council (USGBC) and Green Business Certification Inc (GBCI), “When a bank can rely on verifiable performance data from programmes such as LEED (Leadership in energy and environmental design), it gains the confidence to lend more competitively to sustainable projects. This alignment is what truly accelerates market transformation,” she says. Edited excerpts: 

What are the roles of sustainable finance instruments in advancing India’s green building sector?

Finance is often the bridge between ambition and implementation. In India, sustainable finance instruments are playing this role effectively, turning sustainability goals into measurable results. They are helping developers, planners, and investors move from intent to action by linking capital to performance. The real strength lies not only in the availability of funds but in their design. When loans and investments account for the long-term benefits of sustainable buildings such as lower operating costs, higher occupancy, and reduced risk, sustainability becomes part of the business logic. 

Can you provide real-life examples of green finance applications in India’s realty and infrastructure sectors?

India offers tangible examples of how green finance creates both environmental and economic value. The Delhi Metro pioneered climate-aligned funding for transport, setting a precedent across Asia. In housing, lenders such as HDFC and the State Bank of India have introduced green home products that lower borrowing costs for certified sustainable projects. Developers in Bengaluru, Pune, and Hyderabad are using these instruments to attract institutional investors who value long-term performance and resilience. Information from the Reserve Bank of India, the World Bank, and the India Green Building Council confirms the scale of this transition. What was once considered an innovative niche has become mainstream finance. Today, environmental criteria are increasingly part of how real estate and infrastructure projects are structured, evaluated, and priced.

How do GBCI’s certification programmes, including LEED, align with India’s green finance frameworks to promote sustainable growth?

Certification programmes help align the financial and technical sides of sustainability. They give lenders and investors reliable evidence that a building meets recognized standards in energy, water, and material efficiency. In India, these certifications are gaining ground as a way to strengthen confidence in a project’s performance and reduce perceived risk. At the policy level, this alignment is also visible. Sebi’s green debt guidelines and the Ministry of Finance’s ongoing taxonomy work emphasize transparency and measurable results. Certification systems complement these efforts by offering an independent verification tool that helps financial institutions link capital flows to genuine sustainability outcomes. At GBCI India, we see great opportunity in this alignment. LEED and other GBCI programs provide the credibility and consistency that the financial community needs.

What is your view on the future of sustainable finance in India and its potential to drive both environmental and economic progress?

The outlook for sustainable finance in India is highly promising. With a young population, fast-growing cities, and clear national commitments on climate, the conditions for large-scale progress are already in place. The next step is to make sustainability an integral part of financial decision-making, not a specialized product line. Insights from Reserve Bank publications and discussions among industry leaders show that this shift is underway. Banks and investors are increasingly recognizing that sustainability enhances competitiveness and stability. The challenge ahead will be ensuring that smaller institutions and regional markets also benefit, allowing the movement to reach every part of the economy.

Can you comment on the anticipated growth of the Indian green bond market – which is projected to surpass $15 billion by 2025? It had already reached $21 billion as of February 2023, making the country a leader in Asian emerging markets excluding China.

India’s green bond market is a clear indicator of confidence in sustainable investment. Exceeding 21 billion dollars in issuance by early 2023, it has already outperformed projections and positioned the country as a regional leader. The success reflects strong regulation, transparent disclosure, and credible project pipelines that attract both local and international investors. Analyses from the Reserve Bank of India, market reports, and investor surveys highlight a growing appetite for high-quality green assets. If this trajectory continues, India could become a global example of how emerging economies can finance development while protecting natural resources and strengthening economic resilience. From the perspective of GBCI India, this growth underscores how finance and the built environment can reinforce each other. As investors seek reliable ways to measure impact, certified buildings and infrastructure provide the proof that capital is driving genuine climate progress.