World Bank signs $200 million worth project to scale up innovative renewable energy tech in India

World Bank signs $200 million worth project to scale up innovative renewable energy tech in India

The agreement underscores the Government of India’s commitment to achieve 500 giga-watts (GW) of renewable energy by 2030 in order to address the challenges of climate change.

Sanjay JogUpdated: Friday, December 16, 2022, 06:15 PM IST
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World Bank signs over $200 million worth project to scale up innovative renewable energy tech in India | Image credit: Wikipedia (Representative)

Mumbai: The Government of India, Solar Energy Corporation of India Limited (SECI) and the World Bank have signed agreements for a $150 million International Bank for Reconstruction and Development (IBRD) loan, a $28 million Clean Technology Fund (CTF) loan and a $22 million CTF grant to help India increase its power generation capacity through cleaner, renewable energy sources.

The agreement underscores the Government of India’s commitment to achieve 500 giga-watts (GW) of renewable energy by 2030 in order to address the challenges of climate change. 

India’s transition to renewable sources of energy

The $150 million loan from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a maturity of 25 years. The $28 million loan from the Clean Technology Fund (CTF) has a 10-year grace period, and a maturity of 40 years. The $22 million is an interest-free CTF grant.

The agreement was signed by Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India; C. Kannan, Director Finance, on behalf of SECI; and Hideki Mori, Operations Manager & Acting Country Director, India, World Bank.

India’s transition to renewable sources of energy is one of the most critical transitions for its future,” said Hideki Mori. ‘’The World Bank is committed to supporting India during this transition. This project will bring in international experience in deploying new technologies to the sector and support India’s progress in adopting cleaner, renewable energy fuels.”

The Project aims to address constraints in commercial investments in this sector through increasing the confidence of the various stakeholders. The Project will also help SECI increase market uptake by addressing the barriers to deploying new technologies at scale.

The first solar subproject is being constructed by Battery Energy Solar Systems (BESS) in Rajnandgaon district Chhattisgarh. The second subproject which will have floating solar panels is ongoing at the Getalsud reservoir in Jharkhand.

The net zero emission target

India currently has an installed capacity of more than 409 GW, of which the renewable energy (non-hydro) share is almost 29 percent (119.5 GW). The project will accelerate India’s progress towards sustainable universal electricity access, which is a key milestone for achieving inclusive economic development objectives. 

Strengthening SECI’s capacity is critical to achieving India’s installed RE capacity by 2030 and net zero emission target by 2070. The project will support SECI with human resource and business planning, project monitoring, procurement, financial and contract management, environmental and social safeguards and financial management, among others.

SECI, the Government of India’s nodal agency, is pivotal to pushing the frontiers in mainstreaming renewable energy within the country to accelerate its energy transitions journey. This engagement attempts to introduce nascent technologies in the renewable energy sector at a relatively larger scale. The subprojects financed under this Project aim to displace fossil-fuel based generation by positioning renewable energy to meet peak power demand, establish ecosystem to attract private sector investments, and support institutional strengthening, said Surbhi Goyal, Senior Energy Specialist and World Bank’s Task Team Leader for the project.

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