The World Bank has approved a $1.5-billion loan to help India accelerate its low-carbon energy development, focusing on green hydrogen, electrolysers, and renewable energy. This marks the second round of funding from the World Bank towards India’s green energy initiatives. The initial $1.5-billion loan, approved in June 2023, aimed to develop low-carbon energy by supporting renewable energy projects and creating a legal framework for a national carbon credit market.

The new funding will expand green hydrogen production and consumption and accelerate climate finance development. The World Bank’s Second Low-Carbon Energy Programmatic Development Policy Operation will support reforms to boost green hydrogen and electrolyser production, vital for green hydrogen creation. It also aims to increase renewable energy penetration by incentivizing battery energy storage and amending the Indian Electricity Grid Code for better renewable energy integration.

India’s ambitious energy transition targets include achieving 500 GW of installed renewable energy capacity by 2030 and reaching net zero by 2070. The government also launched the ₹17,000-crore National Green Hydrogen Mission to promote the manufacturing of electrolysers and green hydrogen. The World Bank’s operation supports these goals by waiving transmission charges for renewable energy in green hydrogen projects, launching 50 GW of renewable energy tenders annually, and creating a national carbon credit market.

The reforms are expected to produce at least 450,000 metric tonnes of green hydrogen and 1,500 MW of electrolysers per year from FY25-26 onwards. They will also help increase renewable energy capacity and reduce emissions by 50 million tonnes per year. The operation supports the development of a national carbon credit market and aligns with the Government of India’s energy security and the Bank’s Hydrogen for Development (H4D) partnership. The financing includes a $1.46-billion loan from the International Bank for Reconstruction and Development (IBRD) and a $31.5-million credit from the International Development Association (IDA).