World Bank Approves $1.5 billion Financing for India's Zero Carbon Mission
New Delhi: Supporting India's zero carbon mission, World Bank on Friday said that it approved $1.5 billion in financing to accelerate the country's development of low-carbon energy. The financing will help India promote low-carbon energy by scaling up renewable energy, developing green hydrogen, and stimulating climate finance for low-carbon energy investments.
The World Bank further said that 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. "However, 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 World Bank statement said.
"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, adding that World Bank remains committed to supporting India’s low-carbon transition by complementing public financing and enabling private sector investments.
The programme is expected to scale up renewable energy supply by reducing costs and improving power-grid integration, while helping India reach its committed 500 gigawatts (GW) of renewable energy capacity by 2030. Besides, the government also plans to issue bids for 50 GW of renewable energy each year from FY23-24 to FY27-28, which will avoid carbon emissions of 40 million tons per annum by 2026.
"The industrial sector is the main driver for future growth of energy demand and emissions, and green hydrogen can play a critical role in initially decarbonising the hard-to-abate industrial sectors, such as fertiliser and refinery industries, and later heavy industries, including iron and steel," the statement said.
"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," it added.
The first low-carbon energy programmatic development policy operation – the first in a series of two envisaged operations – will support India in developing green hydrogen. The low-carbon energy is produced by electrolysis of water powered by renewable energy.
"The financing required to implement India’s energy transition is such that public sector funding alone will not be sufficient. Building on recent successes, this operation will help stimulate private financing and other support by addressing viability funding gaps, reducing off-taker risks, boosting grid integration of renewables, and stimulating demand for renewable energy," World Bank said.