World Bank Approves USD 1.5 Billion To Support India’s Low-Carbon Energy Sector

The World Bank has approved USD 1.5 billion in financing to accelerate India’s development of low-carbon energy solutions.

In a blog post, the World Bank highlighted that this financing aims to promote low-carbon energy initiatives by scaling up renewable energy projects, advancing green hydrogen technologies, and facilitating climate finance for investments in low-carbon energy.

This approval marks the second phase of financing following the initial USD 1.5 billion First Low-Carbon Energy Programmatic Development Policy Operation approved in June 2023. That program supported initiatives such as waiving transmission charges for renewable energy and green hydrogen projects.

The new phase of financing will focus on enhancing market capabilities for green hydrogen, scaling up renewable energy capacity, and stimulating investments in low-carbon energy sectors. Specifically, it will support reforms aimed at boosting green hydrogen production, including the development of electrolyzers—critical for hydrogen production. The operation also aims to incentivize battery energy storage solutions and improve the integration of renewable energy into India’s electricity grid through amendments to the Indian Electricity Grid Code.

Recognizing the imperative to decouple economic growth from emissions growth, the World Bank emphasized the need for expanding renewable energy, particularly in challenging industrial sectors. It highlighted the necessity for scaling up green hydrogen production and accelerating climate finance to mobilize investments in low-carbon technologies.

The reforms supported by this operation are expected to significantly contribute to India’s goals, including producing 450,000 metric tons of green hydrogen and 1,500 MW of electrolyzer capacity annually from the financial year 2025-26 onwards. Additionally, it aims to increase renewable energy capacity and achieve emissions reductions of 50 million tons per year. Furthermore, the operation will facilitate the development of a national carbon credit market to bolster India’s climate mitigation efforts.

The World Bank’s support underscores its commitment to assisting India in transitioning to a sustainable, low-carbon energy future, aligning with global climate goals and enhancing the resilience of India’s energy infrastructure.