The UK has launched a $300 million (£224m) in renewable energy platform in India, as the world's third-largest clean energy market races to close a $160 billion annual funding gap in the race to keep its 2030 clean energy targets on track.

British International Investment (BII), the UK's development finance institution, will commit $150 million to the platform, called North Star, with Danish fund manager Copenhagen Infrastructure Partners providing the remaining $150 million.

The platform will invest across solar, wind, hybrid, and storage projects and is expected to generate more than 4 million megawatt-hours of clean energy annually, avoiding around 4 million tonnes of carbon emissions each year.

It is the first investment made through British Climate Partners, a £1.1 billion climate finance initiative that BII launched last month.

"North Star is the first embodiment of that commitment," said Leslie Maasdorp, chief executive of British International Investment. "By partnering with CIP, we are crowding in private capital from day one of this new platform, and I expect further private investment in North Star over the following years."

India has been rapidly increasing its clean energy investments, reaching 50 per cent of total installed electricity capacity from non-fossil sources in June 2025, five years ahead of its Paris Agreement target. In March this year, it crossed 150 gigawatts of installed solar capacity and added a record 44.61 gigawatts in the last financial year – almost double the previous year. India is now the world's third-largest renewable energy market by installed capacity.

But the pace of expansion is creating financing challenges. India needs $160 billion a year to meet its target of 500 gigawatts of non-fossil fuel capacity by 2030, and many developers lack the capital to bring projects from planning through to construction.

Progress has also been uneven, with just a handful of states, including Rajasthan, Gujarat and Maharashtra, having driven most of the growth, while states such as Bihar, Odisha and Uttar Pradesh have been slower to build out clean energy infrastructure.

Peter Jannik Sjøntoft, partner in CIP's Growth Markets Funds, said the platform would deploy "long-term capital into scalable, high-impact renewable investments that contribute meaningfully to India's decarbonisation and energy security goals."

The broader British Climate Partners programme is expected to mobilise £3.5 billion of private capital over five years, with total commitments reaching £4.6 billion across India and fast-growing economies in south and south-east Asia including the Philippines, Indonesia and Vietnam.

The announcement comes amid wider funding cuts by the government, including for climate finance, that have invited backlash from rights groups.

The UK development minister, Baroness Jenny Chapman, said the launch reflected what partner countries had been asking for.

"We have heard what our partners have been calling for. They want to work in partnership with the UK. Countries want to have more control, move beyond aid, attract investment, strengthen their own health and education systems, and take charge of their own futures," Baroness Chapman said.

"Traditional development finance alone cannot meet that call, indeed it never could,” she added. “Nor can it respond to the scale of today's challenges. We need to bring new ideas and a broader coalition of partners to the table.”

This article has been produced as part of The Independent’s Rethinking Global Aid project