World Bank approves $1.5 billion for India’s green hydrogen, RE sector

The World Bank’s Board of Executive Directors has approved $1.5 billion in financing for a second operation aimed at accelerating India’s development of low-carbon energy. This initiative will promote the growth of a robust market for green hydrogen, expand renewable energy, and stimulate investment in low-carbon energy.

In June 2023, the World Bank approved the $1.5 billion First Low-Carbon Energy Programmatic Development Policy Operation. This initial operation supported waiving transmission charges for renewable energy in green hydrogen projects, outlined a clear path for launching 50 GW of renewable energy tenders annually, and established a legal framework for a national carbon credit market.

Auguste Tano Kouame, World Bank Country Director for India, said, “The World Bank is pleased to continue supporting India’s low-carbon development strategy, which will help achieve the country’s net-zero target while creating clean energy jobs in the private sector. Indeed, both the first and second operations have a strong focus on boosting private investment in green hydrogen and renewable energy.”

“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 electrolysers, critical technology needed for green hydrogen production,” the World Bank said in a statement.

The reforms supported by this operation are expected to produce at least 450,000 metric tons of green hydrogen and 1,500 MW of electrolyzers annually from FY25/26 onwards. This initiative will also significantly increase renewable energy capacity and reduce emissions by 50 million tons per year. Additionally, it will further develop a national carbon credit market.

Team Leaders for the operation highlight India’s bold actions to develop a domestic market for green hydrogen, supported by rapidly expanding renewable energy capacity. The first tenders under the National Green Hydrogen Mission’s incentive scheme have shown significant private sector interest.

This operation aligns with the Government of India’s energy security goals and the World Bank’s Hydrogen for Development (H4D) Partnership. The financing includes a $1.46 billion loan from the International Bank for Reconstruction and Development (IBRD) and a $31.5 million credit from the International Development Association (IDA).