India’s low-carbon energy development will receive $1.5 billion from the World Bank’s executive board.
According to the World Bank, the money will assist India in boosting low-carbon energy by scaling up renewable energy, producing green hydrogen, and increasing climate finance for low-carbon energy initiatives.
India’s aggressive energy transition plans are behind the development. By 2030, the Centre aims to install 500 GW of renewable energy capacity and reach net zero by 2070. Recently, the Indian government introduced incentive packages for green hydrogen generation valued at over 17,000 crores.
According to the announcement, the “First Low-Carbon Energy Programmatic Development Policy Operation” will help India generate green hydrogen. Electrolysis of water with renewable energy produces low-carbon energy.
According to the World Bank, more than public sector money is needed to finance India’s energy transition. It stated this operation would drive private financing and other support by addressing viability funding gaps, lowering off-taker risks, improving renewable energy grid integration, and increasing renewable energy demand.
Scaling renewable energy supply reduces costs and improves system integration. India will surpass its 500 GW renewable energy potential by 2030 using. The government will issue bids for 50 GW of renewable energy annually from FY23-24 to FY27-28 to avoid 40 million tonnes of carbon emissions by 2026.
A national carbon market is needed to level the playing field between fossil fuels and low-carbon energy. This program will support a national carbon credit trading scheme to develop a national carbon market. In January 2023, India issued its first sovereign green bond. By 2026, the program will assist sovereign green bond issuance of $6 billion. The bank’s complete support for India’s energy transition includes this activity. India’s energy security strategy supports it. According to the announcement, the operation supports the Bank’s Hydrogen for Development (H4D) Partnership, established during CoP27.
The International Bank for Reconstruction and Development (IBRD) loan of $1.44 billion is facilitated by a $1 billion UK backstop to increase the World Bank’s climate change assistance to India. Recommitted IDA credit amounts total $56.57 million.
