World Bank approves 12,600 crore for India's clean energy transition

The World Bank, a $1.5 billion loan has been approved for expanding renewable energy, creating green hydrogen, assisting carbon markets, and boosting climate financing.

"The Board of Executive Directors of the World Bank approved $1.5 billion in financing to hasten India's adoption of low-carbon energy. According to the World Bank, the funding will aid India in promoting low-carbon energy through boosting renewable energy production, creating green hydrogen, and encouraging climate finance for low-carbon energy developments. It was claimed that the First Low-Carbon Energy Programmatic Development Policy Operation, the first of two planned operations, will aid India in producing green hydrogen.

"Public sector finance alone won't be adequate to carry out India's energy transition due to the cash needed. By addressing viability funding gaps, lowering off-taker risks, increasing grid integration of renewables, and encouraging demand for renewable energy, this operation will assist encourage private financing and other support, it was noted.

Auguste Tano Kouame, Country Director for India at the World Bank, "the programme will support the successful implementation of the National Green Hydrogen Mission, which seeks to stimulate $100 billion in private sector investment by 2030." He continued by saying that the World Bank was dedicated to assisting India in making the transition to a low-carbon economy by enhancing public funding and encouraging private sector investments.

The program's objective is to increase the supply of renewable energy while lowering costs and enhancing grid connectivity. By 2030, India would be able to use 500 GW of renewable energy thanks to this. By soliciting bids for 50 GW of renewable energy per year between FY24 and FY28, the government expects to eliminate 40 million tonnes of carbon dioxide annually by 2026.

"To create an equal playing field for low-carbon energy and fossil fuels, a national carbon market is necessary. In order to start a national carbon market, this programme will support policies for a national carbon credit trading mechanism. India released its first sovereign green bond in January 2023. The programme will assist with the implementation of policies to issue $6 billion in sovereign green bonds by 2026.