Magazine

Last edition
January-February 2025

Home › Investment & Trading ›World Bank Sanctions USD 1.5 Billion in Financing to Expedite India’s Low-Carbon Transition

World Bank Sanctions USD 1.5 Billion in Financing to Expedite India’s Low-Carbon Transition

The financing will assist India boost low-carbon energy by strengthening renewable energy, developing green hydrogen, and establishing climate finance for low-carbon energy investments.

June 30, 2023. By EI News Network

The World Bank’s Board of Executive Directors sanctioned USD 1.5 billion in financing to expedite India’s development of low-carbon energy.

The financing will assist India boost low-carbon energy by strengthening renewable energy, developing green hydrogen, and establishing climate finance for low-carbon energy investments.

India is one of the rapid-rising huge economies in the world. While the country’s energy utilisation per capita is only one-third of the worldwide average, India’s energy demand is anticipated to grow quickly as the economy expands. This calls for a phasing down of fossil-based energy sources in line with India’s goal of achieving net zero by 2070.

The industrial sector is the key force for future growth of energy requirement and emissions, and green hydrogen can perform a crucial role in initially decarbonizing the carbon-intensive sectors, such as fertilizer and refinery industries, and also heavy industries, including iron and steel.

The First Low-Carbon Energy Programmatic Development Policy Operation is considerably the first in a series of two envisaged operations and will assist India in developing green hydrogen.

Auguste Tano Kouame, World Bank Country Director for India, said, “The program will support the successful implementation of the National Green Hydrogen Mission that aims to stimulate $100 billion in private sector investment by 2030”.

He added, "The World Bank remains committed to supporting India’s low-carbon transition by complementing public financing and enabling private sector investments.”

The program targets to level up renewable energy supply by minimising costs and upgrading grid integration.

This will aid India achieve its committed 500 GW of renewable energy capacity by 2030. The government proposes to issue tenders for 50 GW of renewable energy each year from FY23-24 to FY27-28, which will offset carbon emissions of 40 million tons per annum by 2026.

A national carbon market is crucial to facilitate a level playing field between low-carbon energy and fossil fuels. This program will assist policies for a national carbon credit trading scheme to introduce a national carbon market.

This operation is also the Bank’s comprehensive assistance for the energy transition in India. It is in line with the Government of India’s energy security strategy.

The operation is also aligned with the Bank’s Hydrogen for Development (H4D) Partnership launched at CoP27.

The USD 1.44 billion loans is from the International Bank for Reconstruction and Development (IBRD) and is facilitated by a United Kingdom USD 1 billion backstop intended at boosting the World Bank’s climate change financing to India. A USD 56.57 million credit from the International Development Association (IDA) is from a recommitment of canceled IDA credit balances.

Tags:

National Green Hydrogen Mission

Hydrogen for Development

COP27