World Bank Approves $1.5bn in Finance to Support India’s Hydrogen Initiatives

The World Bank’s Board of Executive Directors approved $1.5 billion in financing for a second operation to help India accelerate the development of low-carbon energy. The operation will seek to promote the development of a vibrant market for green hydrogen, continue to scale up renewable energy, and stimulate finance for low-carbon energy investments.

India is the fastest-growing large economy in the world, and the economy is expected to continue to expand at a rapid pace. Decoupling economic growth from emissions growth will require scaling up renewable energy, especially in hard-to-abate industrial sectors. This, in turn, will require an expansion of green hydrogen production and consumption as well as a faster development of climate finance to boost the mobilization of finance for low-carbon investments.

The Second Low-Carbon Energy Programmatic Development Policy Operation – the second in a series of two operations similar in size – will support reforms to boost the production of green hydrogen and electrolyzers, critical technology needed for green hydrogen production.

The operation also supports reforms to boost renewable energy penetration, for instance, by incentivizing battery energy storage solutions and amending the Indian Electricity Grid Code to improve renewable energy integration into the grid. In June 2023, the World Bank approved the $1.5 billion First Low-Carbon Energy Programmatic Development Policy Operation which supported the waiver of transmission charges for renewable energy in green hydrogen projects, the issuance of a clear path to launch 50 GW of renewable energy tenders annually and creating a legal framework for a national carbon credit market.