World Bank Approves $1.5 Billion to Accelerate India’s Low-Carbon Energy Transition

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

The Second Low-Carbon Energy Programmatic Development Policy Operation will support reforms to boost green hydrogen and electrolyzer production, critical for green hydrogen production. It also aims to enhance renewable energy penetration by incentivizing battery energy storage and amending the Indian Electricity Grid Code for better integration of renewable energy. Following the $1.5 billion First Low-Carbon Energy Programmatic Development Policy Operation in June 2023, this operation is expected to produce at least 450,000 metric tons of green hydrogen and 1,500 MW of electrolyzers annually from FY25/26 onwards. Additionally, it will significantly increase renewable energy capacity and reduce emissions by 50 million tons per year, while supporting the development of a national 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 credit from the International Development Association (IDA).

“The World Bank is pleased to continue supporting India’s low-carbon development strategy which will help achieve the country’s net-zero target 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 boosting private investment in green hydrogen and renewable energy.”

“India has taken bold action to develop a domestic market for green hydrogen, underpinned by rapidly expanding renewable energy capacity. The first tenders under the National Green Hydrogen Mission’s incentive scheme have demonstrated significant private sector interest,” added Aurélien Kruse, Xiaodong Wang, and Surbhi Goyal, Team Leaders for the operation. “The operation is helping in scaling up investments in green hydrogen and in renewable energy infrastructure. This will contribute towards India’s journey for achieving its Nationally Determined Contributions targets.”