The United States is working with India to develop ways to lower the cost of capital and increase private investment to fast-track India’s energy transition, U.S. Treasury Secretary Janet Yellen said on Monday.
After a bilateral meeting with India’s finance minister Nirmala Sitharaman on the sidelines of a G20 meeting, Yellen said the two nations have been collaborating across a range of economic issues, including commercial and technological collaboration and strengthening supply chains.
“In particular, we look forward to working with India on an investment platform to deliver a lower cost of capital and increased private investment to speed India’s energy transition,” she said in a statement while attending the G20 in Gandhinagar, the capital of Gujarat, one of India’s most industrialised states.
Yellen did not refer to this platform as a ‘Just Energy Transition Partnership’ (JET-P), though other countries including South Africa, Indonesia and Vietnam have already agreed with public and private sector lenders to help accelerate their shift away from fossil fuels via JET-Ps established with wealthier nations.
Energy analysts say India–a major emitter in absolute terms but relatively lower on a per-capita basis–wants a JET-P on its own terms: no phase out of coal and funds for clean energy expansion in the form of grants, not loans.
Richer, heavy-emitting nations are under pressure to help poorer countries speed up their transition to cleaner energy ahead of the COP28 climate talks in Dubai in November, with the world currently not on course to meet its climate goals.
At the same time as Yellen visited India–her third trip this year and an indication of the growing closeness between the two countries–U.S. climate envoy John Kerry was in Beijing to discuss the climate challenge with his Chinese counterpart.
“As we look ahead, we reaffirm our commitment to achieve substantial outcomes through close engagement,” Sitharaman said in a statement, also noting the potential for development cooperation and alternate investment platforms for renewable energy.
The improvement in bilateral relations was highlighted during Prime Minister Narendra Modi’s state visit to Washington last month which saw a slew of defence and high technology deals being signed.
Yellen also said the two countries are close to reaching an agreement on the global minimum tax system.
In a historical deal in 2021 pushed by the US nearly 140 countries agreed to a minimum 15% tax on large global firms along with additional 25% tax on “excess profits.”
Australia and Japan are hoping to make progress during the G20 meeting on the global minimum tax.
Some analysts doubt whether an agreement can be reached for such a sweeping change in cross-border taxation, as some governments will want to give priority to national tax regimes.
Yellen will visit Vietnam after the G20 finance meetings end on July 18.
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