Faced with the severe challenge of global climate change, energy transition has been recognized as a critical strategy for countries to address this issue. As a financial innovation tool, can green inclusive finance serve as a key solution to the funding bottlenecks of clean energy projects and ensure the sustainability of energy transition? To address this question, this paper develops a theoretical model and employs balanced panel data from 31 provinces (municipalities) in China spanning 2005–2022. We utilize a two-way fixed effects panel model, two-stage least squares (2SLS), and a mediation effect model to empirically examine the impact and mechanisms of green inclusive finance on energy transition.The results demonstrate that green inclusive finance significantly promotes energy transition through three pathways: enhancing technological advancement, improving green total factor productivity, and upgrading industrial structure. Furthermore, the study reveals that the promotive effect of green inclusive finance on energy transition varies under different environmental regulations, industrial agglomeration levels, urban–rural income gaps, and regional economic development stages, with notable regional disparities. Finally, both the degree of openness to foreign trade and supportive policies are found to reinforce this promotive effect. The findings of this research provide policy insights for policymakers in developing countries and other nations facing similar challenges, offering guidance for designing long-term frameworks to advance energy transition.
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