MUMBAI: As landfill capacity tightens in major cities and energy security concerns rise, investors are beginning to revisit a sector long avoided for its execution risks. Waste-to-energy in India is emerging as a policy-supported investment theme, moving from a neglected infrastructure niche, but it remains early, illiquid and operationally constrained.
The shift is being reinforced by new regulatory signals. The newly notified Solid Waste Management (SWM) Rules, 2026 are expected to improve waste segregation and bring greater predictability to project pipelines for companies such as Antony Waste Handling Cell, prompting domestic and global investors to take a fresh look at the sector.
Globally, the waste-to-energy market, valued at $37.29 billion in 2025, is projected to grow to $51.68 billion by 2034 at a compounded annual growth rate (CAGR) of 3.62%, according to a March 2026 report by Fortune Business Research Insights. Asia-Pacific accounted for a 48.24% share in 2025, led by activity in India, China and Japan, the report added.
In India, the waste-to-energy market was valued at $1.56 billion in 2025 and is expected to reach $1.97 billion by 2034, growing at a CAGR of 2.55% from 2026 to 2034, according to consulting firm IMARC Group.
Unlocking investor interest
Multiple forces are converging to draw attention to waste-to-energy, a sub-sector within renewables.
First, regulation is beginning to fix long-standing bottlenecks. The SWM Rules, 2026, along with updated Central Electricity Authority (CEA) guidelines, are expected to improve feedstock quality and provide greater visibility on power purchase agreements—two areas that have historically constrained project viability.
According to Guillaume Dourdin, chief executive and managing director of Indian arm of French waste management major Veolia, these changes are addressing persistent gaps around waste segregation and revenue predictability.
Second, project economics are improving.
Vaibhav Garg, director, Infrastructure & Real Assets Investment Banking at Avendus Capital, said investor appetite has picked up over the past year, supported by regulatory momentum, net-zero commitments and volatility in global fuel and gas prices.
“We are seeing a spike in investor appetite owing to a firmer regulatory push, stronger net-zero and circular economy initiatives by C&I (commercial and industrial) customers and global circumstances affecting fuel and natural gas prices (driving domestic biogas production),” said Garg.
He added that across the sector, equity internal rates of return are typically in the high-teens, depending on project risks and dynamics.
Third, demand-side pressures are becoming harder to ignore. With landfill capacity in major cities nearing exhaustion, waste-to-energy is increasingly being seen as necessary infrastructure.
The fact that private equity investors are actively considering the sector marks a shift from a few years ago, when they largely avoided it, pointed out Dourdin of Veolia. The company is in talks with investors to explore entry into this segment, he said.
Early strategic bets
Large conglomerates are also beginning to step in.
Reliance Industries Ltd has planned a ₹65,000 crore investment to set up 500 compressed biogas (CBG) plants in Andhra Pradesh over the next five years. More recently, JFE Engineering Corp. has partnered with Antony Waste Handling Cell to develop waste-to-energy plants in Andhra Pradesh—its first such investment in India.
Akira Usui, director, Recycling Business Promotion Division, Environmental Solutions Sector at JFE Engineering, said, “We are exploring more investments in this sector in big cities.”
A convergence of policy push, structural need and global capital interest, along with improving project bankability and execution visibility, resulted in this investment, even as JFE has operated in India for over two decades, Usui said.
Antony Waste Handling Cell chairman Jose Jacob said several private equity players have shown interest in understanding the company’s business model.
Separately, renewable energy firm SAEL, which operates agri-waste-to-energy plants alongside solar assets, has attracted global capital, including a $20 million investment from a Norwegian state fund ahead of its planned initial public offer (IPO) in October.
Cautious capital
Even as interest builds, investors remain cautious owing to the long gestation period in this sector.
“This is not a classical startup model driven by valuation cycles, it is closer to project financing, where assets stabilise over time and generate long-term cash flows,” said Vasudha Madhavan, founder and chief executive, Ostara Advisors.
Projects typically take two to three years to stabilise before generating steady returns, making them better suited to patient capital.
“These are operationally heavy businesses that don’t fit the typical VC model. They take time to mature and scale,” said Abhinav Negi, Lead – Climate and Deeptech at Zerodha’s Rainmatter.
For now, investor enthusiasm is returning faster than capital deployment. “Everyone is getting excited, but the level of excitement has not translated yet to realization,” Dourdin said.
This also comes as feedstock availability continues to be a constraint. “There’s no point building high-tech plants if you cannot ensure consistent feedstock supply,” Negi said.
“If you can channel the waste properly in a structured way, the sector can scale much faster,” Madhavan added, noting the need for greater privatisation in waste segregation and logistics.
Early large-scale bets are beginning to build a more predictable pipeline, even as mainstream venture capital and private equity firms continue to evaluate the sector.
Rainmatter, the investment arm of Zerodha, has backed around nine startups across the waste management and waste-to-energy ecosystem, including Green Worms, Hasiru Dala Innovations, PadCare Labs, Ossus, Wastelink and Akshayakalpa Organic, among others, over the past few years.