The World Bank of $1.5 billion is expected to help India accelerate the development and adoption of green hydrogen, a key element in India’s ambitious renewable energy goals.

This loan marks the second round of support from the World Bank, following a similar $1.5 billion granted in June 2023. The new funds will specifically target:

Green Hydrogen Production and Consumption: India is aiming to become a global leader in green hydrogen production, a clean-burning fuel created using renewable energy sources. This loan will support this objective.
Climate Finance Development: The World Bank will help India develop robust climate finance mechanisms, attracting private investment towards low-carbon projects.

Boosting Renewable Energy Integration

The loan will also promote reforms that increase renewable energy penetration within India’s power grid. This includes:

Incentivizing Battery Storage Solutions: Storing renewable energy when production is high allows for its use during peak demand periods.
Enhancing Grid Integration: Upgrading the national grid will ensure the smooth integration of a larger share of renewable energy sources.

The first World Bank loan supported initiatives like:

Waiver of Transmission Charges: This reduces costs associated with integrating renewable energy projects into the grid, making them more attractive.
Annual Renewable Energy Tenders: A consistent pipeline of renewable energy projects is crucial for achieving India’s ambitious 500 GW target by 2030.
National Carbon Credit Market: Creating a market for carbon credits incentivizes businesses to adopt cleaner technologies.

India’s Ambitious Goals

India has set a target of achieving net-zero emissions by 2070. This loan from the World Bank is a significant step towards achieving that goal. It is estimated to:

* Enable the production of at least 450,000 tonnes of green hydrogen per year by 2025-26.
* Increase renewable energy capacity and reduce emissions by 50 million tonnes annually.
* Support the development of a national carbon credit market.

This operation aligns with India’s National Green Hydrogen Mission and the World Bank’s Hydrogen for Development (H4D) partnership. It demonstrates a global commitment to clean energy solutions and achieving climate goals.

The $1.5 billion loan comprises $1.46 billion from the International Bank for Reconstruction and Development (IBRD) and $31.5 million from the International Development Association (IDA). This combined financing package positions India to become a leader in the green hydrogen revolution.

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