World Bank approves $1.5 billion to boost India’s low-carbon energy sector

The world Bank approved $1.5 billion in financing to support India’s transition to low-carbon energy, marking a significant investment in the country’s renewable energy and green hydrogen sectors. Announced on June 29, this funding is the second phase of Low-emission energy program development policy.

According to a World Bank blog post, the financing will help India scale up renewable energy projects, develop green hydrogen capabilities and stimulate climate finance for low-carbon energy investments. This initiative builds on $1.5 billion allocated in June 2023 under the first low-carbon energy development program policy operation, which specifically supported transmission fee waivers for renewable energy in green hydrogen projects.

The newly approved funds are aimed at strengthening the green hydrogen market, a key element of India’s low-carbon strategy. The focus will include developing green hydrogen and the electrolysers required to produce it, as well as encouraging battery storage solutions and amending India’s electricity grid code to better integrate renewable energy.

The World Bank has stressed the importance of decoupling India’s economic growth from emissions, emphasizing the need for a significant expansion of renewable energy, especially in hard-to-abate industrial sectors. To achieve this, the plan calls for producing at least 450,000 metric tons of green hydrogen and installing 1,500 MW of electrolyzers per year, starting in fiscal 2025-26.

In addition to hydrogen, the operation supports increasing renewable energy generation capacity and reducing emissions by 50 million tonnes per year. It also aims to accelerate the development of the domestic carbon credit market, key to encouraging low-carbon investment.

The World Bank’s investment highlights the need to transition to sustainable energy sources to mitigate the effects of climate change. By supporting the production of green hydrogen and the development of renewable energy, the initiative aims to position India as a leader in low-carbon technologies and support its commitment to reducing emissions.