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The chairman of India’s biggest listed renewable energy company by sales has called on multilateral development institutions to support the country’s huge green power programme by offering rupee-denominated debt funding to foreign investors.

Renewable energy has been a prominent part of ambitious infrastructure plans under Prime Minister Narendra Modi’s government, which has committed to increasing generation capacity from such sources from 43 gigawatts to 175 gigawatts by 2022.

The World Bank’s International Finance Corporation and the Asian Development Bank have been funding Indian green power initiatives for several years — responding to demands that rich countries, which have contributed the bulk of carbon emissions, help cover the costs for developing nations trying to minimise the environmental impact of their growth.

But a change in approach from the institutions is needed, according to Tulsi Tanti, founder of Suzlon, a wind turbine manufacturer that returned to profit this year after six years of losses as it struggled with debt incurred to fund expansion in Europe.

The multilateral institutions have focused on lending to the developers of projects but Mr Tanti urged them to back the model championed by Suzlon, which builds completed wind power projects and sells them — typically to foreign investors.

These buyers, such as UK private equity firm Actis, have funded the acquisitions mostly through debt raised from Indian banks. But Mr Tanti said such investment would be boosted dramatically by longer-dated debt funding from the multilateral institutions, potentially enabling India to exceed its 2022 renewable energy target by 50GW.

“They have to come full throttle — 400m people are sitting in the dark,” he said.

Suzlon’s business model has come under scrutiny given its recent heavy losses, and was publicly repudiated in 2013 by its client Morgan Stanley-backed Continuum Wind Energy.

Continuum said it would henceforth build its own projects, complaining that turbine makers and developers such as Suzlon focused on “stuffing as many turbines into the project as possible” instead of on overall efficiency.

Pierre Van Peteghem, treasurer of the ADB, defended the institution’s approach, saying it was encouraging foreign investment in Indian renewable projects through its own partial financing of them, thereby reducing the perceived risks for other investors.

Direct support for renewable energy developers in target countries was a more efficient use of limited capital than funding financial investors from elsewhere, he added.

But Shalabh Tandon, who leads South Asian renewable power investments for the IFC, said Mr Tanti’s suggestion merited consideration, calling Suzlon’s model “a legitimate way of cycling capital leading to asset creation”.

The IFC has invested more than $1bn in Indian renewable projects, while the ADB’s various commitments in the sector include a $500m loan last year to Power Grid Corporation of India for green power transmission.

Mr Tanti said the institutions could expand this support by expanding their use of the offshore “masala bond” market in Indian rupees, which the IFC helped to pioneer, paving the way for the first issuances by Indian corporate issuers over the past month.