World Banks Board of Executive Directors has recently approved 1.5 billion dollars in financing to accelerate Indias development of low-carbon energy

The World Bank's Board of Executive Directors has authorised 1.5 billion dollars in financing to help India speed up its low-carbon energy growth. The World Bank stated in a statement that the funding will assist India in promoting low-carbon energy by scaling up renewable energy, creating green hydrogen, and increasing climate finance for low-carbon energy initiatives. As per the World Bank statement. “India is one of the fastest-growing large economies in the world. While the country’s energy consumption per capita is only one-third of the global average, India’s energy demand is expected to grow rapidly as the economy expands. This calls for a phasing down of fossil-based energy sources in line with India’s goal of achieving net-zero by 2070.” 

The industrial sector is the primary source of future energy demand and emissions, and green hydrogen may play a crucial role in decarbonizing the difficult-to-abate industrial sectors, such as fertiliser and refinery industries, and subsequently heavy industries, such as iron and steel. The statement includes “India has achieved impressive progress in renewable energy installed capacity and a decline in costs. Scaling up the production of renewable energy will accelerate the transition to low-carbon electricity and support the emergence and expansion of the green hydrogen sector.”

The finance scheme, the first of two, intends to assist India in creating green hydrogen. The low-carbon energy is generated by the electrolysis of water using renewable energy. By solving viability funding gaps, decreasing offtaker risks, increasing grid integration of renewables, and promoting demand for renewable energy, the operation will assist drive private financing and other support.

“The programme will support the successful implementation of the National Green Hydrogen Mission that aims to stimulate $100 billion in private sector investment by 2030,” said Auguste Tano Kouame, World Bank Country Director for India.

The program's goal is to increase renewable energy production, lowering prices and increasing grid integration. This would assist India in meeting its commitment of 500 GW of renewable energy capacity by 2030. The government intends to solicit bids for 50 GW of renewable energy per year from FY23-24 to FY27-28, avoiding 40 million tonnes of carbon emissions per year by 2026.

"A national carbon market is required to level the playing field for low-carbon energy and fossil fuels." This initiative will "support policies for a national carbon credit trading scheme in order to launch a national carbon market," according to the announcement.

India will issue its first sovereign green bond in January 2023. The scheme will help policymakers issue $6 billion in sovereign green bonds by 2026.