The World Bank will give India $1.5 billion to finance a second operation to help accelerate the development of low-carbon energy.
This is the second operation which is being supported by the World Bank and cleared by the executive directors' board. The first tranche of $1.5 billion was sanctioned in June last year.
The operation will help promote developing a green hydrogen market as well as scaling up of renewable energy sources like solar and wind.
The Second Low-Carbon Energy Programmatic Development Policy Operation aims to support reforms to boost the production of green hydrogen and electrolysers, critical technology needed for green hydrogen production. The operation also supports reforms to boost renewable energy penetration; for instance, by incentivising battery energy storage solutions and amending the Indian Electricity Grid Code to improve renewable energy integration 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 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.”
The reforms supported by the operation are expected to result in the production of at least 4,50,000 metric tonnes of green hydrogen and 1,500 MW of electrolysers per year from the next financial year. In addition, it will also significantly help to increase renewable energy capacity and support reductions in emissions by 50 million tonnes per year. The operation will also support steps to further develop a national carbon credit market.
“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,” said Aurélien Kruse, Xiaodong Wang, and Surbhi Goyal, Team Leaders for the operation.
The 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).