World Bank approves $1.5 billion for India low-carbon energy transition

The World Bank's Board of Executive Directors approved $1.5 billion to accelerate India's low-carbon energy development, scaling renewables, advancing green hydrogen and stimulating climate finance. The First Low-Carbon Energy Programmatic Development Policy Operation directly supports India's National Green Hydrogen Mission and its 500 GW renewable and net-zero-by-2070 targets.

The World Bank approved $1.5 billion to support India's low-carbon energy transition, comprising a $1.44 billion IBRD loan backed by a $1 billion UK commitment and a $56.57 million IDA credit. The First Low-Carbon Energy Programmatic Development Policy Operation, first of two planned, supports green hydrogen produced by electrolysing water using renewables. It backs the National Green Hydrogen Mission targeting $100 billion in private investment by 2030, India's 500 GW renewable capacity goal by 2030, and net-zero emissions by 2070.

Hard-to-abate industrial sectors are the principal beneficiaries, with green hydrogen targeted first at fertilisers and refineries, then heavy industries such as iron and steel. Renewable energy developers, off-takers and private financiers gain support to address funding gaps, reduce off-taker risk, enhance grid integration and boost renewable demand. The government plans to issue bids for 50 GW of renewable energy annually from FY23-24 to FY27-28, cutting 40 million tonnes of carbon emissions per year by 2026.

Indian industrial firms, renewable developers and financial institutions should track implementation of the national carbon credit trading scheme and the launch of the national carbon market, both supported by this operation to create a level playing field between low-carbon and fossil energy. Entities should monitor the planned issuance of $6 billion in sovereign green bonds by 2026, building on India's first sovereign green bond issued in January 2023, and prepare to participate in the blended public-private financing the programme is designed to unlock.

Key figure — World Bank financing approved: $1.5 billion for India's low-carbon transition