Quad-Aligned Green Finance for Decarbonizing India’s Ports
India’s 12 major ports play an integral role in foreign trade with 95% of trade volume reported. India’s flagship ‘Sagarmala’ programme, launched in 2015, seeks port modernization and sustainable growth. With a budget of Rs. 40,000 Cr (USD 4.51 billion) allocated towards the upgrade shipbuilding, recycling, and ports- the message remains clear, India is gearing up for its maritime revolution.
Under the ‘PM Gati Shakti,’ Sagarmala projects are integrated into a national multimodal masterplan, effectively increasing connectivity between 16 Indian Ministries to work towards infrastructure connectivity projects. In tandem, the government’s ‘Harit Sagar Green Port Guidelines’ mandate measures such as electrifying port cranes and vehicles, adopting cleaner fuels for trucks, and installing shore power for ships. These policies reflect India’s climate pledges by channeling investment into energy-efficient infrastructure. Yet, port decarbonization—shore-side electrical power, electric vehicles (EV) yard vehicles, hydrogen bunkering, and smarter logistics—requires substantial capital.
In an era of resource nationalism, cooperating with ‘QUAD partners’ could potentially be an effective strategy. The Quad countries have launched a ‘Ports of the Future Partnership’ to share expertise and mobilize funds for ‘sustainable and resilient port infrastructure development’. The agenda aims to address complexities regarding cooperation on green ports and shipping. This paper provides context and recommendations on how India could align its policies with Quad-centric green financing, domestic reforms, Multilateral Development Banks (MDB) loans, and Development Finance Institutions (DFI) investments—to transform its ports into low-carbon, digitally optimized hubs.
India’s policy framework strongly supports port modernization tied to sustainability. The ‘Sagarmala Programme’ works as a testament to India’s port-led development and broader coastal economic zones strategy. In its latest phase, Sagarmala 2.0 focuses on shipbuilding, repair, and ‘port modernization’ to leverage a Rs. 12 Lakh Cr (USD 136 billion) of investment. Complementarily, the Sagarmala Startup & Innovation Initiative (S2I2) funds R&D and startups in green shipping, smart ports, and coastal sustainability. The PM Gati Shakti additionally binds Sagarmala with national infrastructure-bringing together railways, highways, waterways and ports under one digital planning portal, ensuring seamless last-mile connectivity.
Recent climate policies further reinforce decarbonization. The Ministry of Ports (MoPSW) issued the ‘Harit Sagar’ guidelines covering port decarbonization. The guidelines propose a carbon credit scheme to reward ports meeting greenhouse gas (GHG) intensity targets (30% by 2030 and 70% by 2047). Concurrently, India’s National Green Hydrogen Mission is stimulating green hydrogen hubs near industrial and port clusters. A joint Government of India–Japan Clean Energy Partnership (2022) specifically includes pilot projects on hydrogen/ammonia in the shipping sector. At the international level, Quad summits have underscored ports- the 2024 Summit launched a ‘Quad Ports of the Future’ initiative, and Indian leaders are set to host a regional ports conference in 2025 to mobilize investments. These policy actions signal strong support for financing port decarbonization projects.
Financing Instruments
Port decarbonization is intrinsically a complex sector that requires innovative financing. Domestically, India is expanding its green finance toolkit. Notably, the new ‘Sagarmala Finance Corporation Ltd. (SMFCL),’ a Non-banking Financial Company (NBFC) created in 2025, is dedicated to maritime infrastructure. SMFCL, which holds a Rs. 680 Cr (USD 77 million) equity, bridges the naval sector’s funding gap, offering loans, equity, and blended finance for ports, shipbuilding, logistics corridors and related green projects. The financing mechanism has the potential to greatly boost the green transition in the maritime industry as it explicitly aims to finance shore-power plants and hydrogen bunkering at ports. Other national financing avenues include state infrastructure bonds and the budding green bond market, which has the potential to mobilize up to Rs. 20,000 crore (USD 2.26 billion) by 2030- provided targeted reforms and structured support mechanisms are implemented. SEBI’s green-bond framework (with over USD 55 bn issued by end-2024) can additionally be tapped by port authorities or developers. India could further explore ‘blue bonds’ for coastal regions, which could be aligned with global standards and adapted to domestic priorities.
International and Quad-aligned channels are equally vital. Multilateral development banks have growing port portfolios- the Asian Development Bank (ADB) is rolling out a $1 billion Sustainable & Resilient Maritime Fund (SRMF) to underwrite green ports across Asia, emphasizing energy efficiency, clean fuels, and resilience. ADB already finances projects linking ports to dedicated freight corridors, and supported an ADB–JICA USD 131M deal to electrify Mumbai’s Jawaharlal Nehru Port terminal. The effort would ease congestion and lower GHGs. Japan’s JICA, aligned with its ACCESS climate facility, provides concessional loans for port expansions that reduce emissions through funding electrification, similar to the Jawaharlal Nehru Port Trust. Japan Bank for International Cooperation (JBIC) similarly backs infrastructure, providing finance by supporting green transformation initiatives, including renewable energy projects. India’s own Export-Import Bank, while focused on exports, could parallel its Quad peers in supporting port equipment exports for better transparency standards to drive up private investment.
Quad DFIs offer another tier of support. In October 2024 US DFC hosted a meeting with Japan, Australia and India’s DFIs (JBIC, EXIM India, EFA) to coordinate infrastructure finance. Although the current DFC portfolio in India emphasizes energy and critical minerals, Quad DFI talks explicitly aim to mobilize private capital for ‘new, quality infrastructure projects’ including clean energy. Export Finance Australia (EFA) and the Australian Infrastructure Financing Facility (AIFFP) have co-financed Indo-Pacific projects and could be directed towards Indian ports. Moreover, ‘Port of the Future’ programs should leverage guarantees and blended finance. An example would be utilizing sovereign green bonds that have been used globally to underwrite port transition projects. The Indian government could channel its own green bond in multilateral co-financing.
India’s capital markets also matter. SEBI’s 2025 ESG bond norms mandate third-party reviews and impact reporting, raising transparency. This makes green port bonds more credible and would drive up decarbonization efforts. Blended instruments can reduce risk through multilateral guarantees on port loans, and use of blended funds such as ADB’s new Green Ports Facility. Domestic banks and NBFCs, including SMFCL, might offer green loans tied to CSR or priority sector categories.
Finally, public-private partnerships should be incentivized- the Shipping Ministry’s draft guidelines encourage discounts on port dues and priority berths for clean-fuel ships. Such incentives can improve bankability of loans for retrofits.
Policy Recommendations
To catalyse further green financing for ports, India could adopt certain measures:
- Develop a National Blue Finance Taxonomy- Formally, include port decarbonization i.e. shore power, port-side renewables, hydrogen bunkering- in SEBI’s guidelines. This enables ports to issue blue or sustainability bonds with a clear criteria meeting international standards.
- Strengthen Green/Blue Bond Market- Encourage port authorities and related infrastructure SPVs to issue bonds. The government could guarantee or co-invest in first issuances, and facilitate third-party certification.
- Provide Credit Enhancement- Utilization of public funds such as SIDBI, IREDA, or a multilateral guarantee to absorb initial technology risks. For instance, extend partial credit guarantees for first-mover solar/shipping fuel projects. Quad agencies might co-guarantee large projects such as co-finance under a potential JICA-ADB-Exim structure.
- Quad-Backed Technical Assistance- Deploy Quad programs to de-risk projects. The forthcoming Regional Ports Conference (2025) and ongoing Quad Infrastructure Fellowship can build local capacity in port financing. A Quad-led Port Project Preparation Facility could help Indian ports prepare bankable green projects for MDB submission.
- Leverage Sagarmala Finance Corporation- Empower SMFCL with blended-finance tools. Additionally grant concessional refinance on port electrification loans which would provide the private sector navigate risk management. SMFCL could partner with international funds, such as the Japan Green Fund, to raise low-cost capital.
- Incentivize Private Investment- Fully operationalize the proposed incentives in the Green Port Guidelines through discounted port dues or priority berths for low-emission ships. Such policy carrots make port projects more creditworthy. Similarly, consider tax breaks or customs benefits for green port equipment imports.
- Integrate Energy and Digital Planning- Through PM GatiShakti’s GIS portal, map renewable energy potential, charging infrastructure and hydrogen corridors tied to ports. Utilizing this data to attract project investors would further promote digital optimization (e-logistics, traffic management) as part of ‘smart port’ conditions in concessions to improve returns.
Modernizing India’s ports is essential for economic growth and for meeting climate commitments. A concerted strategy of leveraging national programs (Sagarmala, Gati Shakti), regulatory reforms (green bonds, incentives), and strategic partnerships with Quad-aligned institutions, could mobilize the massive capital needed for India’s modern port infrastructure. Recommendations include building a clear taxonomy, offering guarantees and incentives, and fostering public–private project pipelines. If India ties together its policy frameworks with Quad expertise, it can transform its ports into clean-energy hubs. This will not only slash maritime emissions but also enhance trade efficiency and regional leadership- fulfilling India’s decarbonization goals ‘Amrit Kaal’ vision.
