Renewable energy has acquired an importance that extends well beyond climate policy. The Paris Agreement of 2015 established the long-term imperative of reducing greenhouse gas emissions, but subsequent geopolitical shocks have given renewables a second and increasingly important rationale: energy security. Russia’s invasion of Ukraine exposed the vulnerability of economies dependent on imported fossil fuels and triggered a major reassessment of energy policy. The present US-Iran conflict has reinforced that lesson. With attacks disrupting oil infrastructure and shipping routes around the Gulf, Brent crude has again moved above $100 a barrel, underlining the exposure of oil-importing economies to events far beyond their control.

The significance for South Asia is considerable. The region is among the world’s most populous and fastest-growing energy markets, yet most countries remain dependent on imported fossil fuels. Renewables therefore offer a dual opportunity: meeting growing electricity demand while reducing exposure to international fuel prices and geopolitical disruptions. The IEA notes that a more electrified, efficient and renewables-rich system can reduce exposure to fossil-fuel price volatility, although new vulnerabilities emerge around grids, critical minerals and clean-energy supply chains.

The transition, however, is uneven. India has become its principal regional driver. According to the International Renewable Energy Agency (IRENA), India had approximately 250 GW of renewable power capacity at the end of 2025, compared with about 78.6 GW in 2015. It added roughly 24.5 GW of solar capacity during 2024 alone.

Sri Lanka had 2.51 GW, Nepal and Bhutan 3.5 GW, Pakistan 13 GW, and Bangladesh 1.6 GW at the end of 2025. Nepal and Bhutan possess substantial hydropower resources relative to their domestic markets, while Sri Lanka has significant hydro, solar and wind potential. Pakistan has witnessed a rapid expansion of distributed solar, while Bangladesh remains much more dependent on gas and imported fuels.

These differences are important because installed renewable capacity does not by itself constitute an energy transition. South Asian electricity demand continues to rise as industrialisation, urbanisation, air-conditioning and digitalisation accelerate. Coal, oil and gas therefore remain important even as renewable capacity expands. The relevant question is whether renewable growth is sufficiently rapid to displace fossil-fuel use rather than simply accommodate additional electricity demand.

Finance and the New Dependencies

Finance is one of the principal constraints to making this transition happen, from non-renewables to renewables. The Climate Policy Initiative (CPI) estimates that climate finance in South Asia increased from around $26 billion in 2018 to $41 billion in 2022. The Climate Policy Initiative estimates that the requirement for South Asia is about $7.8 trillion per year between 2025 and 2030, but has received only $2.1 trillion in 2025. The requirement is substantial, but financing remains well below what is required for the region’s infrastructure, adaptation and clean-energy needs. Capital is also unevenly distributed, with larger and more creditworthy economies attracting a disproportionate share. High interest rates and currency risks make renewable projects particularly difficult to finance in poorer South Asian economies.

India again illustrates both the opportunity and the limitation. Its large domestic capital market and policy support have allowed renewable investment to expand substantially. Yet fossil fuels continue to dominate important parts of the economy, especially transport and industrial energy. India consequently faces a dual strategy: accelerating domestic renewable production while maintaining diversified supplies of imported oil. Russian crude has become particularly important in India’s import portfolio since 2022.

This illustrates the wider geopolitical paradox. Renewable energy reduces dependence on imported oil and gas, but the technologies required for the transition introduce other external dependencies. China occupies a particularly important position in global solar manufacturing, battery production and critical-mineral processing. Western economies remain important sources of capital and advanced technologies. Russia continues to matter through hydrocarbons and nuclear cooperation, while Gulf states remain major suppliers of oil and gas.

South Asia is therefore not simply moving from dependence on one external power to dependence on another. It is attempting to diversify its sources of energy, finance and technology. The strategic question is whether that diversification produces greater autonomy or merely changes the form of dependence.

The BRICS Factor and NDB

This is where BRICS acquires significance.

India’s position within BRICS provides it with a platform through which energy security, development finance, technology cooperation and the interests of emerging economies can be pursued outside exclusively Western institutional frameworks. The expanded BRICS grouping has increasingly discussed energy security alongside renewable energy and energy-transition issues. Its 2025 energy cooperation roadmap explicitly seeks greater cooperation in energy while recognising that member states have different energy structures and development priorities.

The New Development Bank (NDB), sometimes called the BRICS Bank, is potentially more consequential than BRICS declarations themselves. Its mandate covers infrastructure and sustainable development, and it has financed renewable and other clean-energy projects. For South Asia, the importance lies in whether such institutions can mobilise larger volumes of long-term capital for grids, storage, hydropower, solar and regional electricity connectivity.

But BRICS should not be regarded as a renewable-energy alliance. Its members have sharply different interests. China remains heavily dependent on coal; Russia is a major hydrocarbon producer; India remains a large oil importer. Consequently, BRICS places energy security and development alongside decarbonisation rather than subordinating the former to the latter.

This may nevertheless be useful for South Asia. Countries facing high borrowing costs need more—not fewer—sources of finance. India, Bangladesh, Nepal, Sri Lanka and Pakistan have an interest in accessing Western climate finance, Gulf capital, Chinese technology and investment, and multilateral institutions simultaneously. BRICS can potentially enlarge those choices rather than replace existing institutions.

The geopolitical significance of renewables is therefore becoming clearer. Fossil-fuel dependence exposes South Asian economies to events such as wars in the Middle East, sanctions, shipping disruptions and sudden price increases. The present Iran crisis demonstrates that vulnerability once again. At the same time, dependence on imported solar equipment, batteries, critical minerals and technology can create new vulnerabilities.

The objective should consequently be diversification rather than geopolitical substitution. A South Asian country that replaces imported oil with imported clean-energy technology has improved its energy security in one dimension but may remain vulnerable in another. Greater domestic manufacturing, stronger electricity grids, storage capacity, regional power trading and diversified financing are therefore as important as adding renewable capacity.

The regional opportunity is particularly significant in electricity. Nepal and Bhutan can potentially export hydropower; India can provide the scale of demand and investment required to create a regional electricity market; Bangladesh can become an important electricity consumer; and Sri Lanka and Pakistan can expand solar and wind. Greater cross-border electricity trade could allow countries to exploit complementary renewable resources and reduce the need for expensive domestic backup capacity.

Maximum Diversification Need of the Hour

South Asia’s renewable transition is consequently best understood as both a climate response and an energy-security strategy. The Paris Agreement supplied the long-term environmental imperative; the Ukraine crisis demonstrated the economic and geopolitical costs of fossil-fuel dependence; and the current Iran conflict has again exposed the vulnerability of global energy supply routes.

The transition is real, particularly in India, but it remains incomplete. Renewable capacity is expanding faster than the transformation of the wider energy system. Fossil fuels remain indispensable, finance remains inadequate and new dependencies on clean-energy technologies are emerging.

BRICS adds another layer to this process. It is unlikely to determine South Asia’s renewable trajectory, but it can widen the region’s access to finance, technology and South-South cooperation. Its significance lies less in creating an alternative geopolitical bloc than in giving countries additional options.

For South Asia, the strategic objective should therefore be neither alignment with China and Russia nor dependence on the United States and Western institutions. It should be maximum diversification of energy, technology and finance. The ultimate test of the renewable transition is not the number of gigawatts installed, but whether it makes the region less exposed to external energy shocks while increasing its capacity to make independent economic and geopolitical choices.

(The writer is a retired Special Secretary, Government of India, and a commentator on financial, geoeconomic and regional issues. The views expressed are personal. He can be reached at ppmitra56@gmail.com.)