World Bank clears $1.5-bn to back India's low-carbon transition

The $1.44 billion loan is from the International Bank for Reconstruction and Development (IBRD) and is facilitated by a $1-billion UK backstop aimed at boosting the World Bank’s climate change financing to India. A $56-57 million credit from the International Development Association (IDA) is from a recommitment of cancelled IDA credit balances.

India aims to achieve net-zero by 2070.  The industrial sector is the main driver for future growth of energy demand and emissions, and green hydrogen can play a critical role in initially decarbonising industrial sectors like fertilizer and refinery industries, and later heavy industries.

India has achieved impressive progress in renewable energy installed capacity and a decline in costs. Scaling up the production of renewable energy will accelerate the transition to low-carbon electricity and support the emergence and expansion of the green hydrogen sector, the World Bank said in a release. 

The First Low-Carbon Energy Programmatic Development Policy Operation—the first in a series of two envisaged operations—will support India in developing green hydrogen. Low-carbon energy is produced by electrolysis of water powered by renewable energy.

The financing required to implement India’s energy transition is such that public sector funding alone will not be sufficient. Building on recent successes, this operation will help stimulate private financing and other support by addressing viability funding gaps, reducing off-taker risks, boosting grid integration of renewables and stimulating demand for renewable energy.

“The programme will support the successful implementation of the National Green Hydrogen Mission that aims to stimulate $100 billion in private sector investment by 2030,” said Auguste Tano Kouame, World Bank country director for India.

The programme will help India reach its committed 500 GW of renewable energy capacity by 2030. The government plans to issue bids for 50 GW of renewable energy each year from fiscals 2023-24 to 2027-28, which will avoid carbon emissions of 40 million tonnes per annum by 2026.

It will support policies for a national carbon credit trading scheme to launch a national carbon market and issuance of $6 billion in sovereign green bonds by 2026.

Fibre2Fashion News Desk (DS)