World Bank Approves $1.5 Billion in Financing to Support India’s Low-Carbon Transition

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, 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 Board of Executive Directors of the World Bank authorized $1.5 billion in funding to expedite India’s advancement in low-carbon energy development. By increasing the use of renewable energy, creating green hydrogen, and encouraging climate finance for low-carbon energy projects, the funding will assist India in promoting low-carbon energy.

• The $1.44 billion loan is from the International Bank for Reconstruction and Development (IBRD) and is facilitated by the United Kingdom.

• $1 billion backstop aimed at boosting the World Bank’s climate change financing to India.
• A $56.57 million credit from the International Development Association (IDA) is from a recommitment of cancelled IDA credit balances.

The program’s goal is to increase the supply of renewable energy while lowering costs and enhancing grid connectivity. This will assist India in achieving its 2030 target of 500 GW of renewable energy capacity. From FY 23 –24 to FY 27–28, the government intends to invite bids for 50 GW of renewable energy annually. This will prevent 40 million tons of carbon emissions annually by 2026.

This operation is only one piece of the Bank’s comprehensive support to energy transition in India. It is aligned with the Government of India’s energy security strategy. The operation is also aligned with the Bank’s Hydrogen for Development (H4D) Partnership launched at CoP27.

The $1.44 billion loan is from the International Bank for Reconstruction and Development (IBRD) and is facilitated by a United Kingdom $1 billion backstop aimed at boosting the World Bank’s climate change financing to India. A $56.57 million credit from the International Development Association (IDA) is from a recommitment of cancelled IDA credit balances.