A total of U$1.5bn in financing has been approved by the World Bank to aid India in promoting low-carbon energy by scaling up renewable energy and developing green hydrogen, in addition to stimulating climate finance for low-carbon energy investments.
The significant amount of financing – awarded through a Low-Carbon Energy Development Policy Loan as the World Banks – seeks to support three parts of the country’s Long-Term Low-Carbon Development Strategy which was revealed at COP27 in 2022. This included the development of green hydrogen infrastructure within India.
The financing will be used to bolster the country’s policies and regulations surrounding green hydrogen production with a view to increasing market demand while simultaneously reducing costs. The financing also aims to stimulate private finance and reduce the risk for off-takers.
Additionally, due to the extra renewable power requirements required for green hydrogen production, the World Bank is seeking to scale up renewable energy supply, resulting in reduced production costs and enhanced grid integration. Furthermore, the project aims to improve climate financing to meet the significant investment needs for green hydrogen and renewable energy by supporting the establishment of a national carbon market.
“The program will support the successful implementation of the National Green Hydrogen Mission that aims to stimulate $100bn in private sector investment by 2030,” said Auguste Tano Kouame, the World Bank’s country director for India. “The World Bank remains committed to support India’s low-carbon transition by complementing public financing and enabling private sector investments.”
The financing follows India approving an incentive plan worth U$2bn early on in 2023 to boost green hydrogen development within the country under its Green Hydrogen Mission.