World Bank second $1,5 billion loan reflects confidence in India’s green hydrogen policies.
The World Bank has extended a second $1.5 billion loan to India within a year, driven by confidence in the nation’s aggressive green hydrogen and low-carbon energy policies. The funding supports India’s ambitions to scale up renewable energy and establish a robust green hydrogen market.
The Indian government’s policy interventions to foster a domestic ecosystem for green hydrogen and low-carbon energy have been confidence-inspiring, according to a World Bank representative, prompting the financial institution to extend a second $1.5 billion development loan within a year, marking a significant endorsement of India’s green energy initiatives
Last month, the World Bank provided a $1.5 billion loan to India to support the development of a green hydrogen market and other related goals. This follows an identical loan granted in June 2023.
The loan was sanctioned following government measures like subsidies for manufacturing electrolyzers and green hydrogen, which have been pivotal in shaping the country’s energy landscape, said Surbhi Goyal, senior energy specialist, World Bank.
Surbhi Goyal, senior energy specialist, World Bank, said:
We saw a lot of actions were taken by the government, especially on demand generation for green hydrogen, which gave us a lot of confidence.
“Even other policy actions were quite aggressive”
These loans are part of the World Bank’s development policy financing scheme, focusing on three pillars: promoting green hydrogen, scaling up renewable energy for green hydrogen production, and enhancing financial access for these projects.
The government’s strategic policy interventions include tenders by the Solar Energy Corp of India (SECI) to establish electrolyzer and green hydrogen manufacturing in India. Another significant move is the introduction of the Carbon Credit Trading Scheme (CCTS), anticipated to ignite a domestic carbon credit market and improve financial access for low-carbon energy projects.
Defining green hydrogen for policy purposes in August 2023 was another crucial step. “That also gave a lot of clarity on what India would accept as green hydrogen,” Goyal noted.
Government policies aimed at generating demand for green ammonia and green hydrogen have also boosted investor confidence. Last month, SECI invited bids for supplying 539,000 million tonnes of green ammonia per annum for the fertilizer industry. Similarly, state-owned oil marketing companies are working on tenders to establish green hydrogen units at their refineries.
“This is a very strong demand signal. Any stakeholder we are talking to is saying these tenders have given a lot of confidence that ‘Yes, now India has shown its seriousness towards green hydrogen,'” Goyal said.
The World Bank has set several key performance indicators for the two loans and will monitor them until June 2026, though it has not established interim targets.
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World Bank second $1,5 billion loan reflects confidence in India’s green hydrogen policies. source
