World Bank approves $1.5 billion to support India’s ET Auto low-carbon energy sector

The World Bank on June 29 approved $1.5 billion in financing to accelerate India’s low-carbon energy development.

“The financing will help India promote low-carbon energy by scaling up renewable energy, developing green hydrogen and stimulating climate finance for low-carbon energy investments,” the World Bank said in a blog post.

In addition to this second phase of financial stimulus, last June the World Bank approved the $1.5 billion First Low Carbon Energy Development Policy, which supported the removal of transmission fees for renewable energy in green hydrogen projects.

With this funding, efforts will be made to expand the market potential for green hydrogen. There will also be a focus on scaling renewable energy and stimulating financing for low-carbon energy investments, according to the statement.

The second action under the Low Carbon Energy Development Policy will support reforms to increase the production of green hydrogen and electrolysers, the key technologies needed to produce green hydrogen. The operation also supports reforms to increase the penetration of renewable energy, for example by encouraging the use of battery storage solutions and amending the Indian Electricity Grid Code to improve the integration of renewable energy into the grid.

The World Financial Organisation, recognising the need to decouple India’s economic growth from growth in emissions, has pointed out that decoupling economic growth from growth in emissions will require increasing the use of renewable energy, especially in hard-to-cut industrial sectors.

He added that India will require expanded production and consumption of green hydrogen, as well as accelerated expansion of climate finance to increase financing mobilisation for low-carbon investments. The reforms supported by the operation are expected to lead to production of at least 450,000 metric tonnes of green hydrogen and 1,500 MW of electrolysers per year from fiscal year 2025-26.

In addition, it will also help increase renewable energy capacity and support emission reductions of 50 million tons per year. The operation will also support activities aimed at further developing the domestic market for carbon credits.