European Investment Bank eyes green hydrogen to add to India renewables push

The EIB is the lending arm of the European Union, with around €5 billion in investments in India since 1993.
The EIB is the lending arm of the European Union, with around €5 billion in investments in India since 1993.

Summary

  • Earlier in 2023, the development bank had stated its interest in supporting India’s National Green Hydrogen Mission with a facility of up to €1 billion

Even as solar and wind continue to be focus areas, the European Investment Bank (EIB) is now keen to jump into green hydrogen in the country, but no concrete proposal has been tabled yet by Indian companies, a top executive at the development bank said.

“We’re actively watching this race, because, as a financier, we want to have our flag there and come in when it’s ready, either on the public sector side or on the private sector side. We have a team that works with larger corporates, and they’re talking to a few," Nina Fenton, head of regional representation, South Asia. EIB, said in an interview. She added that the EIB is in touch with corporates through the Indian Hydrogen Alliance, of which the bank is a part.

Earlier in 2023, the bank had stated its interest in supporting India’s National Green Hydrogen Mission with a facility of up to €1 billion.

The EIB is the lending arm of the European Union (EU), with around €5 billion in investments in India since 1993. The bank’s investments in the country have focused on public infrastructure, green energy and on providing support to Indian private sector firms.

The EU, Fenton said, is working to lend a helping hand to the green hydrogen ecosystem and the EIB is hoping to bring in more technical resources to India.

Other renewable technologies have also been focus areas for the EIB’s green energy investments. “Of what we’ve done so far, it’s about 50:50 towards solar and wind, and a tiny bit of hydro," Fenton said, adding that the EIB is also keeping its eyes on offshore wind, and “we will be very happy if a financing proposal comes to it."

The green energy space in India is getting increasing investor and financier focus as the government plans to ramp up renewable energy installation and achieve 500 gigawatt (GW) of installed renewable energy in the country by 2030, and net-zero carbon emissions by 2070. These objectives have resulted in high potential for investments in the green energy space.

The International Energy Agency (IEA) projects that the total investment in clean energy supply and clean technology manufacturing in India would double by 2030 from $60 billion in 2022. The IEA’s World Energy Outlook 2023, however, said that investments in clean energy need to triple to $180 billion by the end of this decade for India to achieve its net-zero emissions targets. According to KPMG, by 2047, annual investments worth $350-400 billion would be required to meet the country’s ambitious clean energy targets.

According to Invest India, the country’s investment promotion and facilitation agency, currently there is an investment opportunity of around $216 billion in the renewable energy space in the country; data showed that 467 renewable energy projects are underway across 230 districts in the country with 150 promoters.

Both green hydrogen and offshore wind are capital-intensive segments and would require heavy investments to grow. With the government rolling out the ambitious National Green Hydrogen Mission along with a 19,000 crore incentive schemes for green hydrogen and electrolyzers, several business houses are planning to foray into this segment. India aims to produce 5 million tonnes of green hydrogen by 2030.

Further, the government is also planning to provide viability gap funding for offshore wind projects and plans these projects along the coastline in Tamil Nadu and Gujarat. The ministry of new and renewable energy has announced that it would hold auctions for offshore wind sites along the Tamil Nadu coastline.

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