The World Bank has approved a second round of $1.5 billion in financing to help India accelerate its development of low-carbon energy. This funding aims to promote the market for green hydrogen, electrolysers, and increased renewable energy penetration. The initiative aligns with India’s National Green Hydrogen Mission and energy transition targets, including achieving 500 GW of installed renewable energy capacity by 2030 and reaching net zero by 2070.
Background
- First Round of Funding (June 2023):
The World Bank initially approved a $1.5 billion loan for the First Low-Carbon Energy Programmatic Development Policy Operation. This supported transmission charge waivers for renewable energy in green hydrogen projects, annual renewable energy tenders of 50 GW, and the creation of a national carbon credit market framework.
Objectives of the Second Round
- Green Hydrogen Market:
Boost production and consumption of green hydrogen. - Electrolyser Production:
Support the production of critical technology needed for green hydrogen production. - Renewable Energy Penetration:
Encourage battery energy storage solutions and amend the Indian Electricity Grid Code for better renewable energy integration.
Expected Outcomes
- Green Hydrogen Production:
450,000 metric tonnes of green hydrogen per year from FY25-26. - Electrolysers:
1,500 MW of electrolysers per year from FY25-26. - Emissions Reduction:
Reduction of 50 million tonnes of emissions per year. - Renewable Energy Capacity:
Significant increase in renewable energy capacity.
Strategic Importance
- National Green Hydrogen Mission:
Aligns with the ₹17,000-crore mission to promote electrolyser and green hydrogen manufacturing. - Private Sector Investment:
Focus on boosting private investment in green hydrogen and renewable energy.
Financial Structure
- Loan and Credit:
$1.46 billion loan from the International Bank for Reconstruction and Development (IBRD) and $31.5 million credit from the International Development Association (IDA).
Statements from World Bank
- Auguste Tano Kouame, World Bank Country Director for India:
Emphasized the support for India’s low-carbon development strategy, highlighting the creation of clean energy jobs. - Operation Team Leaders:
Noted the significant private sector interest and the alignment with India’s energy security and the Bank’s Hydrogen for Development (H4D) partnership.