World Bank Approves $1.5 Billion to Fast-Track India's Low-Carbon Energy Transition: What's Ahead?

The World Bank has granted a substantial financing package of USD 1.5 billion to India to expedite the development of its low-carbon energy infrastructure. This financial support aims to bolster renewable energy scaling and green hydrogen initiatives in the country.

Recognizing India as one of the world's fastest-growing large economies, the World Bank emphasized that India's energy demand is expected to surge alongside its expanding economy.

Presently, India's per capita energy consumption is merely one-third of the global average. The country has set an ambitious target to achieve net-zero emissions by 2070.

Scaling Up Renewable Energy and Green Hydrogen:

Earlier, the World Bank kept its April forecasts unchanged, projecting India's growth for FY24 at 6.3%, increasing to 6.4% in FY25. For FY26, it has projected a growth of 6.5%. It said India will lift the growth prospects of the South Asian region.

The World Bank acknowledged India's remarkable progress in increasing its renewable energy installed capacity while simultaneously reducing costs.

The production of green hydrogen involves using renewable energy-powered electrolysis to split water molecules. India has already approved the National Green Hydrogen Mission, which aims to establish the nation as a global hub for green hydrogen technologies. The mission's initial financial outlay is estimated at Rs 19,744 crore, covering research, development, and other related activities. The successful implementation of this mission is projected to stimulate $100 billion in private-sector investments by 2030.

Decarbonization & Green Hydrogen Production Targets:

India's National Green Hydrogen Mission seeks to gradually decarbonize the industrial, transportation, and energy sectors. Through this mission, the government aims to achieve an annual green hydrogen production capacity of 5 million tonnes while simultaneously adding approximately 125 gigawatts of renewable energy capacity. These efforts will play a crucial role in reducing greenhouse gas emissions and promoting sustainable development.

World Bank's Commitment to India's Low-Carbon Transition:

The World Bank, reaffirming its commitment to India's low-carbon transition, intends to complement public financing with support for private sector investments. The organization recognizes the significance of a national carbon market in ensuring fair competition between low-carbon energy sources and fossil fuels. Accordingly, the financing package will also facilitate the implementation of policies aimed at establishing such a market.

India's Ambitious "Panchamrit" Pledge:

During the COP26 summit in Glasgow in 2021, India made a comprehensive pledge called "Panchamrit." The pledge encompasses five key commitments, including reaching 500 gigawatts of non-fossil electricity capacity, generating half of the country's energy from renewable sources, reducing emissions by 1 billion tons by 2030, and decreasing the emissions intensity of GDP by 45 percent. India's long-term goal is to achieve net-zero emissions by 2070.