The World Bank has granted $1.5 billion in financing to help India speed up its low-carbon energy growth by increasing renewable energy, creating green hydrogen, and encouraging climate finance for low-carbon energy initiatives.
The International Bank for Reconstruction and Development (IBRD) loan of $1.44 billion is supported by a $1 billion UK guarantee targeted at increasing the World Bank’s climate change assistance to India. The International Development Association (IDA) credit of $56-57 million is a recommitment of canceled IDA credit amounts.
India plans to attain net-zero emissions by 2070. The industrial sector is the primary driver of future increases in energy consumption and emissions, and green hydrogen may play a vital role in decarbonizing industrial sectors such as fertilizer and refinery industries, as well as heavy industries later on.
India has made significant progress in renewable energy installed capacity and cost reductions. Scaling up renewable energy output will speed the transition to low-carbon power and promote the creation and expansion of the green hydrogen industry, according to a World Bank statement.
The First Low-Carbon Energy Programmatic Development Policy Operation, the first of two planned operations, will help India generate green hydrogen. Water electrolysis fueled by renewable energy produces low-carbon energy. The investment needed to accomplish India’s energy transformation is so large that public sector finance alone will not enough. Building on recent accomplishments, this operation will assist drive private financing and other support by resolving viability funding gaps, lowering off-taker risks, increasing renewable grid integration, and driving renewable energy demand.
“The program will help the National Green Hydrogen Mission, which aims to stimulate $100 billion in private sector investment by 2030,” said Auguste Tano Kouame, World Bank country director for India.
The plan will assist India in meeting its commitment of 500 GW of renewable energy generation by 2030. The government intends to solicit bids for 50 GW of renewable energy per year from fiscal years 2023-24 to 2027-28, avoiding 40 million tones of carbon emissions per year by 2026.
It will support measures establishing a national carbon credit trading program to establish a national carbon market, as well as the issue of $6 billion in sovereign green bonds by 2026.
