World Bank Grants $200 Million Loan to Himachal Pradesh for Renewable Energy and Power Sector Reform
Shimla, June 28
In a significant move towards promoting sustainable development and reducing reliance on fossil fuels, the World Bank’s Board of Executive Directors has granted a loan of $200 million to the Government of Himachal Pradesh. The loan aims to support power sector reforms and bolster the state’s efforts to increase the share of renewable energy in its electricity generation. This initiative aligns with Himachal Pradesh’s vision of becoming a ‘Green State’ and meeting 100 percent of its energy needs through renewable and green energy sources by 2030.
Himachal Pradesh, which currently fulfills over 80 percent of its energy demands from hydropower, intends to add 10 gigawatts of additional renewable energy capacity to its power supply, making it significantly greener. The World Bank’s Himachal Pradesh Power Sector Development Program will play a crucial role in optimizing the utilization of existing renewable energy resources, including hydropower, and further diversifying the state’s renewable energy portfolio. Notably, the program aims to install 150 megawatts of solar capacity, leading to a reduction of over 190,000 metric tons of greenhouse gas emissions annually.
According to Auguste Tano Kouamé, the World Bank’s Country Director for India, the program will stimulate local economic activity while facilitating the shift from fossil-fuel-based energy consumption to renewable energy. Furthermore, it will enable Himachal Pradesh to establish a single energy trading desk, allowing the state to sell surplus hydropower to other regions.
Beyond its immediate impact, the Himachal Pradesh Power Sector Development Program will serve as a model for the Indian power market by encouraging new investments in renewable energy. By addressing the challenges of uninterrupted power supply and implementing advanced technologies, such as a demand response management system, the program aims to strengthen the state’s transmission and distribution grid. This will enable seamless access to renewable energy, particularly during peak load periods when the state would otherwise rely on costly fossil-fuel-based power sources. The introduction of automated systems will pave the way for providing clean and reliable 24×7 power supply, minimizing power outages, and reducing consumer complaints.
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Moreover, the program will bolster environmental, social, financial management, corporate governance, and procurement capabilities of the state’s power sector utilities and agencies. It will also contribute to job creation, particularly in specialized technical and managerial fields, with a particular focus on empowering women. As part of the initiative, approximately 700 female apprentices will receive training within the power sector, providing them with valuable hands-on exposure and technical skills. This initiative builds upon the National Apprentice Promotion Scheme implemented by the Ministry of Skill Development and Entrepreneurship.
Surbhi Goyal and Pyush Dogra, team leaders for the Himachal Pradesh Power Sector Development Program, highlighted the importance of promoting sustainable practices within the state’s power utilities. By transitioning to a green and low-carbon electricity system, the program will significantly contribute to Himachal Pradesh’s aspiration of becoming one of the country’s first ‘Green States.’
The $200 million loan, provided by the International Bank for Reconstruction and Development (IBRD), features a final maturity of 14.5 years, including a grace period of 4.5 years. This long-term financial support underscores the World Bank’s commitment to facilitating sustainable development and advancing renewable energy initiatives in Himachal Pradesh.
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