The World Bank has approved a $1.5 billion loan to help promote the development of the green hydrogen market and increase renewable energy penetration in India.
The World Bank has approved the second round of a $1.5 billion loan to help India boost its low-carbon energy development. The funds will help promote a vibrant green hydrogen market, scale up renewable energy and boost financing for low-carbon energy investments.
India, the fastest growing major economy in the world, is expected to continue growing rapidly. Decoupling economic growth from emissions growth requires scaling up renewable energy, especially in hard-to-fight industrial sectors. This requires expanding the production and consumption of green hydrogen and developing climate finance to incentivize low-carbon investments.
The World Bank’s second programmatic low-carbon energy development policy operation will support reforms to boost the production of green hydrogen and electrolyzers. It will also support reforms to increase renewable energy penetration, boost battery energy storage solutions and amend India’s Electricity Grid Code to improve renewable energy integration.
In June 2023, the World Bank approved the first programmatic development policy operation worth US$1.5 billion. This supported the exemption of renewable energy transmission costs in green hydrogen projects, created a clear path to launch 50 GW of renewable energy tenders annually, and created a legal framework for a national carbon credit market.
“Both the first and second operations are strongly focused on stimulating private investment in green hydrogen and renewable energy,” said Auguste Tano Kouame, World Bank Country Director for India.
“India has taken bold action to develop a domestic market for green hydrogen, supported by rapidly growing renewable energy capacity. The first tenders under the National Green Hydrogen Mission incentive program have shown significant interest from the private sector,” said Aurélien Kruse, team leader for the operation. “The operation will help scale up investments in green hydrogen and renewable energy infrastructure. This will contribute to India’s journey towards achieving Nationally Determined Contribution targets.”
This operation is aligned with the Indian government’s energy security and the Bank’s Hydrogen for Development (H4D) Partnership.
Financing for the operation includes a $1.46 billion loan from the International Bank for Reconstruction and Development and a $31.5 million credit from the International Development Association.
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