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World Bank to Provide $1 Billion Line of Credit to State Bank of India


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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. The financing aims to support the expansion of battery storage systems and electric mobility initiatives across the country. 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.

As of April 2024 State Bank of India has a market cap of $80.59 Billion.

Importance of Battery Storage Systems for India’s Energy Grid

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 Central Electricity Authority (CEA) estimates that India will need 27 GW of battery storage systems with four hours of storage by 2030 to firm up renewable energy output.

Support for Electric Vehicle Initiatives

Alongside storage, the credit line will also 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.

Expert Opinions on World Bank Financing

Energy analysts have welcomed the World Bank’s financing, stating that such multilateral support is crucial for accelerating India’s energy transition. Subsidized financing can provide great impetus through pilot projects and contractual templates.

Vinay Rustagi, Senior Director and Global Head of Renewables at CRISIL, a ratings agency, emphasized the importance of subsidized financing in driving the transition.

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