The World Bank on June 29, approved USD 1.5 billion in financing to accelerate India’s development of low-carbon energy.
“The financing will help India promote low-carbon energy by scaling up renewable energy, developing green hydrogen, and stimulating climate finance for low-carbon energy investments.,” the World Bank said in a blog post.
Apart from this second phase of financing stimulus, last year in June 2023, the World Bank approved the USD 1.5 billion First Low-Carbon Energy Programmatic Development Policy Operation, which supported the waiver of transmission charges for renewable energy in green hydrogen projects.
With this financing, efforts will be made to enhance the market capability for green hydrogen. The emphasis will also be given to scaling up renewable energy and stimulating finance for low-carbon energy investments, as per the statement.
The second Low-Carbon Energy Programmatic Development Policy Operation will support reforms to boost the production of green hydrogen and electrolyzers, critical technology needed for green hydrogen production. The operation also supports reforms to boost renewable energy penetration, for instance, by incentivizing battery energy storage solutions and amending the Indian Electricity Grid Code to improve renewable energy integration into the grid.
Recognising the need to separate India’s economic growth from emission growth, the World Finance Organisation pointed out that decoupling economic growth from emissions growth will require scaling up renewable energy, especially in hard-to-abate industrial sectors.
It added that India will require an expansion of green hydrogen production and consumption as well as a faster development of climate finance to boost the mobilisation of finance for low-carbon investments. The reforms supported by the operation are expected to result in the production of at least 450,000 metric tons of green hydrogen and 1,500 MW of electrolyzers per year from the financial year 2025-26 onwards.
In addition, it will also help to increase renewable energy capacity and support reductions in emissions by 50 million tons per year. The operation will also support steps to further develop a national carbon credit market.