World Bank approves more $1.5 billion in financing to boost India's alternative fuel objective 

World Bank's green push: The Board of Executive Directors of the World Bank has given a go-ahead to $1.5 billion in financing for a second straight operation to help India fast-track the development of low-carbon energy. 

The operation that envisages bolstering green hydrogen and renewable energy will have a pointed focus based on promotion of boosting a vibrant market for green hydrogen. Besides, scaling up renewable energy, and stimulating finance for low-carbon energy investments is among other contours of the financing. 

As the country is on a speedy economic growth, having earned the tag of a large global economy, and the economy is expected to continue to expand at a rapid pace.  To have decoupling of economic growth from emissions growth will require scaling up renewable energy, especially in the traditional industrial sectors. This is expected to require an expansion of green hydrogen production and consumption as well as a faster development of climate finance to boost the mobilisation of finance for low-carbon investments. 

The Second Low-Carbon Energy Programmatic Development Policy Operation, the consecutively second of two similar-sized initiatives, is set to advance reforms aimed at enhancing the production of green hydrogen and electrolysers, vital technologies for green hydrogen production. 

This operation envisages to increase renewable energy integration by promoting battery energy storage solutions and revising the Indian Electricity Grid Code to better incorporate renewable energy into the grid.

In June 2023, the World Bank approved the $1.5 billion First Low-Carbon Energy Programmatic Development Policy Operation. This initial operation facilitated the waiver of transmission charges for renewable energy used in green hydrogen projects, outlined a strategy to launch 50 GW of renewable energy tenders annually, and established a legal framework for a national carbon credit market.

"The World Bank is pleased to continue supporting India’s low-carbon development strategy. We are confident that this will help achieve the country’s net-zero target while creating clean energy jobs in the private sector,” said Auguste Tano Kouame, World Bank Country Director for India. “Both the first and second operations are strongly focused on boosting private investment in green hydrogen and renewable energy.”

This series of operations highlights the World Bank's commitment to supporting India’s efforts to transition to a low-carbon economy, fostering sustainable growth and environmental stewardship.