According to recent reports, the World Bank's Board of Executive Directors has granted approval for $1.5 billion in financing, aiming to accelerate India's progress in low-carbon energy development. This financing is intended to support India in scaling up renewable energy sources, fostering the growth of green hydrogen, and encouraging climate finance for low-carbon energy investments.

India, as a rapidly growing economy, faces increasing energy demand and aims to achieve net-zero emissions by 2070. The adoption of green hydrogen can help decarbonize the industrial sector, including challenging areas like fertilizers, refineries, and heavy industries.

The First Low-Carbon Energy Programmatic Development Policy Operation will focus on supporting India's green hydrogen initiatives through private financing and risk reduction measures.

World Bank's Auguste Tano Kouame reaffirmed support for India's low-carbon transition, combining public and private investments. The program aims to scale up renewable energy, reaching 500 GW capacities by 2030 and reducing emissions by 40 million tons annually by 2026.

To establish a level playing field between low-carbon energy and fossil fuels, the program intends to support the implementation of a national carbon credit trading scheme and the launch of a national carbon market. India's sovereign green bond issuance, initiated in January 2023, will be further supported through policy actions to issue $6 billion in sovereign green bonds by 2026.

Experts leading the project emphasize that India can effectively decouple emissions from economic growth through improved energy efficiency and transitioning to clean energy sources. By implementing sustained policy reforms, India can attract private sector investments, create employment opportunities, and successfully achieve its net-zero targets.

The approved financing is part of the World Bank's comprehensive support for India's energy transition, aligning with the government's energy security strategy. Furthermore, the operation is consistent with the Bank's Hydrogen for Development (H4D) Partnership, which was launched at CoP27.

India will receive a $1.44 billion loan from IBRD, supported by a $1 billion backstop from the UK, to enhance the World Bank's climate change financing. IDA will also provide a $56.57 million credit through recommitment of cancelled balances.

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