June 29th 2024.
The World Bank has recently made an exciting announcement, stating their approval of $1.5 billion in financing for India's low-carbon energy development. This marks the second operation of its kind and aims to support the country's impressive growth as the fastest-growing large economy in the world. The operation, known as the 'Low-Carbon Energy Programmatic Development Policy Operation', will focus on implementing crucial reforms that will boost the production of green hydrogen and electrolysers.
These reforms are in alignment with the Indian government's energy security plans and the World Bank's Hydrogen for Development Partnership. According to the World Bank, the expected outcome of these reforms is the production of at least 450,000 metric tonnes of green hydrogen and 1,500 MW of electrolysers annually from the fiscal year 2025/26 onwards. Additionally, the operation will also lead to a significant increase in renewable energy capacity and a reduction in emissions by 50 million tonnes per year.
Furthermore, the operation will also support the development of a national carbon credit market. Auguste Tano Kouame, the World Bank Country Director for India, expressed their pleasure in continuing to support India's low-carbon development strategy. They believe that this will not only help the country achieve its net-zero target but also create job opportunities in the private sector. Kouame also highlighted the operation's focus on attracting private investment in green hydrogen and renewable energy.
The Indian economy is expected to continue expanding at a rapid pace, and the World Bank believes that decoupling economic growth from emissions growth is crucial. This can be achieved by scaling up renewable energy, especially in hard-to-abate industrial sectors. The team leaders for the operation, Aurelien Kruse, Xiaodong Wang, and Surbhi Goyal, acknowledged India's bold actions in developing a domestic market for green hydrogen, supported by the country's rapidly expanding renewable energy capacity.
The first operation of $1.5 billion was approved by the World Bank in June 2023, and it focused on various initiatives such as waiving transmission charges for renewable energy in green hydrogen projects, creating a clear path to launch 50 GW of renewable energy tenders annually, and establishing a legal framework for a national carbon credit market. With the second operation now in place, India's journey towards a low-carbon future is set to accelerate, bringing in more opportunities for growth and development.
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