The World Bank‘s Board of Executive Directors approved a loan of $200 million to the Government of Himachal Pradesh to help the Indian state achieve its target of adding 10 GW of additional renewable energy capacity and introducing new reforms in its power sector.

The loan provided under the World Bank’s Himachal Pradesh Power Sector Development Program will help the state government increase the share of renewables in its energy generation.

The above investment will provide a template for India’s power market for underwriting new investments in renewable energy, World Bank said in a statement.

The loan will have a final maturity of 14.5 years, including a grace period of 4.5 years.

The hilly terrains in Himachal are known to pose challenges in maintaining the region’s uninterrupted power supply, which delays power restoration during breakdown.

The investment by the World Bank is expected to strengthen the state’s power grid and bring in advanced technologies like a demand response management system and seamless access to clean energy.

The state currently fulfills more than 80% of its energy demand from hydropower.

Himachal Pradesh aims to become green by meeting 100% of its energy needs through renewables by the end of the current decade.

The loan will help diversify the state’s renewable energy resources while completely utilizing the existing clean sources.

Under the loan program, the state has already announced the plans to add 150 MW of solar capacity that would help mitigate over 190,000 metric tons of greenhouse gas emissions every year.

World Bank’s Country Director for India, Auguste Tano Kouamé, said, “The program will boost local economic activity while replacing fossil-fuel-based energy consumption with green energy. Moreover, the program will support Himachal Pradesh to set up a single energy trading desk, thus enabling the sale of surplus hydropower to other states.”

The power utilities in Himachal will be supported through the loan to train around 700 female apprentices throughout the program’s lifespan, giving them hands-on exposure and training in technical roles within the power sector. This will build on the National Apprentice Promotion program implemented by the Ministry of Skill Development and Entrepreneurship.

In January this year, Word Bank signed agreements with the Indian Government and the Solar Energy Corporation of India for loans and grants amounting to $200 million. The loans would help deploy clean energy technologies in India while accelerating the country’s efforts toward achieving the target of 500 GW of renewable energy by 2030.

According to the International Finance Corporation, a member of the World Bank Group, India will require around $403 billion in financing by 2030 to achieve its renewable energy goals, including mitigating carbon emissions by over 45%.