World Bank approves $1.5 billion to accelerate India’s transition to low-carbon energy

The World Bank’s Board of Executive Directors has approved $1.5 billion in financing to help India accelerate its low-carbon energy development. This second operation aims to promote a vibrant green hydrogen market, scale up renewable energy and stimulate financing for low-carbon energy investments.

The second operation of the Low Carbon Energy Programmatic Development Policy will support reforms to increase green hydrogen and electrolyser production, which is key to green hydrogen production. It also aims to increase renewable energy penetration by encouraging battery storage and amending the Indian Electricity Grid Code to better integrate renewable energy. Following the first operation of the $1.5 billion Low Carbon Energy Programmatic Development Policy in June 2023, this operation is expected to produce at least 450,000 metric tonnes of green hydrogen and 1,500 MW of electrolysers per year from FY25/26. It will also significantly increase renewable energy capacity and reduce emissions by 50 million metric tonnes per year, while supporting the development of a domestic carbon credit market.

The financing includes a $1.46 billion loan from the International Bank for Reconstruction and Development (IBRD) and a $31.5 million loan from the International Development Association (IDA).

“The World Bank is pleased to continue to support India’s low-emission development strategy, which will help achieve the country’s net-zero emissions target while creating clean energy jobs in the private sector,” said Auguste Tano Kouame, World Bank Country Director for India. “Indeed, both Operation I and Operation II have a strong focus on scaling up private investment in green hydrogen and renewable energy.”

“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,” added 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.”

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