World Bank approves additional $1.5 billion to support India’s green hydrogen and renewables – pv magazine India

July 1, 2024 Uma Gupta

The World Bank has approved a second round of $1.5 billion in loans to help India develop low-carbon energy. The funds will help promote the development of a vibrant green hydrogen market, continue to scale renewable energy and stimulate financing for low-carbon energy investments.

India is the fastest growing major economy in the world and the economy is expected to continue to grow at a rapid pace. Decoupling economic growth from emissions growth will require scaling up renewable energy, especially in industrial sectors that are difficult to contain. This, in turn, will require an increase in the production and consumption of green hydrogen, as well as a faster development of climate finance to stimulate the mobilization of funds for low-emission investments.

The second action of the World Bank’s Low Carbon Energy Development Policy Development Program – the second in a series of two operations of similar size – will support reforms to increase green hydrogen production and electrolysers, a critical technology needed to produce green hydrogen. It will also support reforms to increase renewable energy penetration, for example by encouraging the use of battery energy storage solutions and amending the Indian Power Grid Code to improve the integration of renewable energy into the grid.

In June 2023, the World Bank approved the first low-carbon energy development policy program operation worth $1.5 billion, which supported the removal of transmission fees for renewable energy in green hydrogen projects, the issuance of a clear path to launch 50 GW of renewable energy tenders per year, and the creation of legal framework for the domestic carbon credit market.

Auguste Tano Kouame, World Bank India Director, said: “Both the first and second operations place a strong emphasis on increasing private investment in green hydrogen and renewable energy.”

World Bank-backed reforms are expected to produce at least 450,000 metric tons of green hydrogen and 1.5 GW of electrolysers per year, starting from FY25/26. In addition, it will significantly help increase renewable energy capacity and support emission reductions by 50 million tons per year. It will also support activities aimed at further development of the domestic carbon credit market.

“India has taken bold steps to develop a domestic green hydrogen market, supported by rapidly expanding renewable energy capacity. The first tenders under the National Green Hydrogen Mission incentive program have shown significant interest from the private sector,” said Aurélien Kruse, Xiaodong Wang and Surbhi Goyal, team leaders for the operation. “The operation is helping to scale up investments in green hydrogen and renewable energy infrastructure. This will contribute to India’s achievement of its Nationally Determined Contributions.”

This operation is in line with the energy security policy of the Government of India and the Hydrogen Bank for Development (H4D) program.

Financing for the operation includes a $1.46 billion loan from the International Bank for Reconstruction and Development and a $31.5 million loan from the International Development Association.