The World Bank will provide $1.5 billion to India for clean energy transition

The World Bank will provide India with $1.5 billion to finance a second operation to accelerate the development of low-carbon energy.

This is the second operation to be supported by the World Bank and approved by the board of executive directors. The first tranche of $1.5 billion was approved last June.

The operation will help promote the development of the green hydrogen market, as well as the scaling up of the use of renewable energy sources such as solar and wind energy.

The second low-carbon energy programmatic development policy operation aims to support reforms to increase green hydrogen production and electrolysers, a key technology needed to produce green hydrogen. The operation also supports reforms to increase renewable energy penetration; for example, by encouraging battery energy storage solutions and amending the Indian Power Grid Code to improve the integration of renewable energy into the grid.

“The World Bank is pleased to continue supporting India’s low-carbon development strategy, which will help achieve the country’s net-zero emissions goal while creating clean energy jobs in the private sector,” said Auguste Tano Kouame, World Bank Country Director for India. “Indeed, both the first and second operations have a strong focus on increasing private investment in green hydrogen and renewable energy.”

The reforms supported by this operation are expected to lead to the production of at least 4,50,000 metric tons of green hydrogen and 1,500 MW of electrolysers per year from the next fiscal year. It will also significantly help increase renewable energy capacity and support emission reductions of 50 million tons per year. This operation will also support efforts to further develop the domestic carbon credit market.

“India has taken bold steps to develop a domestic green hydrogen market, supported by rapidly expanding renewable energy. 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, Operations Team Leaders.

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