New Delhi, Aug. 29 -- Currency hedging could add 6-8 per cent to the annual financing costs of green projects in India, increasing the cost of foreign capital and potentially limiting large-scale investment by global institutional investors, according to the India Sustainability Taskforce, a joint initiative of the Confederation of Indian Industry (CII) and IIM Ahmedabad.

The taskforce said most green projects in India generate revenues in rupees, while international investors typically provide financing in currencies such as the US dollar and euro. This mismatch exposes projects to currency risk and raises the effective cost of overseas funding, ANI reported.

Currency Risk Raises Financing Costs

"Hedging long-term currency exposure is...