World Bank Approves $1.5 Billion to Accelerate India’s Low-Carbon Energy Transition

The World Bank has approved $1.5 billion in financing to support India’s ambitious low-carbon energy development goals. This second phase of the Low-Carbon Energy Programmatic Development Policy Operation aims to strengthen the country’s green hydrogen market, scale up renewable energy, and enhance access to climate finance.

India, one of the world’s fastest-growing economies, is set to decouple its economic growth from carbon emissions through these initiatives, creating a sustainable energy future and meeting its net-zero commitments.

Boosting Green Hydrogen and Renewable Energy

The World Bank's program emphasizes reforms to bolster the production of green hydrogen and electrolyzers—crucial technologies for clean energy development. The initiative also incentivizes battery energy storage solutions and updates India’s Electricity Grid Code to ensure smoother renewable energy integration.

Earlier, the World Bank’s first phase of the program in June 2023 enabled key reforms such as waiving transmission charges for renewable energy in green hydrogen projects and setting a 50 GW renewable energy tendering goal annually.

Driving Private Investment and Carbon Market Development

The program is designed to attract private sector investments into green hydrogen and renewable energy markets. By establishing a legal framework for a national carbon credit market, it will further promote sustainable practices across industries.

“The World Bank is proud to support India’s low-carbon energy strategy, which aligns with its net-zero targets and fosters job creation in the clean energy sector,” said Auguste Tano Kouame, World Bank Country Director for India.

Transformative Targets for FY25/26 and Beyond

The program is expected to deliver impressive results by FY25/26:

• Production of at least 450,000 metric tons of green hydrogen annually.

• Installation of 1,500 MW of electrolyzer capacity per year.

• Significant renewable energy capacity additions.

• Reduction of 50 million tons of CO₂ emissions annually.

  
  

The reforms further align with India’s Nationally Determined Contributions (NDC) targets and the World Bank’s Hydrogen for Development (H4D) Partnership.