In a recent development, the World Bank board of executive directors has given the go-ahead to $1.5 billion in funding to speed up low-carbon energy development in India.
A statement rolled out by the World Bank said that the funding is going to enable India to promote low-carbon energy by enhancing renewable energy, developing green hydrogen, and stimulating climate finance for investments pertaining to this kind of energy.
It is well to be noted that the centre has the aim of getting to 500 GW of installed renewable energy capacity by the end of this decade and also touching net zero by 2070.
Moreover, recently, the government of India launched the much-awaited incentive schemes when it comes to the production of green hydrogen, worth more than Rs. 17000 crores.
The statement elaborated that the first low-carbon energy programmatic development policy operation, which happens to be the first in a series of 2 envisaged operations, will go on to aid India in the development of green hydrogen. The low-carbon energy happens to be produced with the help of the electrolysis of water, which is powered by renewable energy.
The World Bank said in a statement that the funding needed to execute the country’s energy shift is such that public sector financing alone will not prove to be sufficient. Building on the recent wins, this operation is going to help stimulate private funding and other support by taking into account viability funding gaps, lessening off taker risks, enhancing renewables’ grid integration, and pushing renewable energy demand.
As per the World Bank Country Director for India, Auguste Tano Kouame, the programme will go on to aid the successful execution of the National Green Hydrogen Mission, which looks to put-in investment worth $100 billion in private sector by 2030.
He also added that the World Bank is committed to aiding India’s low-carbon shift by syncing with public financing and also making sure of private sector investments.
This programme looks to scale up the supply of renewable energy, thereby lessening costs and enhancing grid integration. This is going to enable India to breach the 500 GW renewable energy goal by 2030.
Government aims at issuing bids when it comes to 50 GW of renewable energy each FYs from 23-24 to 27-28, which is going to help in carbon emissions avoidance of 40 million tonnes per year by 2026.
A national carbon market happens to be vital so as to provide the playing field between fossil fuels and also low carbon energy. This programme is going to prove to be supportive of policies pertaining to a national carbon credit trading scheme in order to launch a national credit market.
Significantly, in January of this year, India went on to issue its first ever sovereign green bond. The programme is going to support policy actions when it comes to the issuance of $6 billion in sovereign green bonds by 2026.
The statement said that the operation happens to be just one piece of the world bank’s overall support for the energy transition across India. It happens to be in sync with the Indian government’s strategy on energy security. Operation is in sync with the bank’s Hydrogen for Development Partnership, which was launched at CoP27.
The $1.44 billion loan happens to be from the International Bank for Reconstruction and Development and is aided by a $1 billion backstop by the UK aimed at enhancing the World Bank’s climate change funding to India. A $56.57 million credit, apparently from International Development Association happens to be a recommitment of IDA credit balances that are cancelled.