(MENAFN- KNN India) New Delhi, Apr 18 (KNN) The World Bank is planning to provide a USD 1 billion line of credit to the State Bank of India (SBI) to accelerate India's transition to clean energy, according to sources familiar with the development.
The financing aims to support the expansion of battery storage systems and electric mobility initiatives across the country, reported Mint.
The credit line comes at a crucial time as India races to meet its ambitious renewable energy targets while grappling with rising crude oil prices and import dependency on fossil fuels. The funds will be disbursed in tranches to mobilise early investments and attract private capital in these green sectors.
Large-scale Battery Energy Storage Systems (BESS) are vital for integrating intermittent solar and wind power into India's electricity grid. As the government aims to install 500 gigawatts (GW) of renewable capacity by 2030, requiring 50 GW of annual additions, grid-scale storage will be instrumental in managing fluctuations and ensuring stable power supply.
“The proposed project is under preparation and the details are being finalised," a World Bank spokesperson said.
The Central Electricity Authority (CEA) estimates India will need 27 GW of battery storage systems with four hours of storage by 2030 to firm up renewable energy output.
Alongside storage, the credit line will support India's electric vehicle (EV) initiatives, a key pillar of the nation's green transition. Widespread EV adoption can significantly reduce greenhouse gas emissions, improve air quality in cities, and curtail India's dependence on imported fossil fuels.
However, high upfront costs and inadequate charging infrastructure have hindered EV uptake so far. The government has implemented several incentives, including tax rebates, production-linked incentives, and a dedicated policy for faster EV adoption and manufacturing.
Energy analysts have welcomed the World Bank's financing, stating that such multilateral support is crucial for accelerating India's energy transition.
"Subsidised financing can provide great impetus through pilot projects and contractual templates," said Vinay Rustagi, Senior Director and Global Head of Renewables at CRISIL, a ratings agency.
As India strives to achieve its updated Nationally Determined Contribution (NDC) of sourcing 50 per cent of its installed power generation capacity from non-fossil fuel sources by 2030, concerted efforts and strategic investments in clean energy solutions will be indispensable.
(KNN Bureau)
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