Germany Looks to Fund India’s Energy Transition Projects with €1 billion

Germany has proposed to fund India’s energy transition projects with €1 billion. The projects are to be executed all over the country under a bilateral partnership between the two countries on green and sustainable development.

As per discussions held between India and Germany, the funding will pave the way for over 20 projects spread over the following year in India. The funding is to entail 10% grants and 90% in the form of lines of credit and will be aimed at  accelerating the country’s efforts in the areas of renewable energy, sustainable urban development in smart cities and using natural resources in a sustainable manner, as revealed by German ambassador Philipp Ackermann said.

Ackermann said that both India and Germany take similar approaches to finding solutions and have exchanged views with regards to climate change. He called India “the single largest recipient of German cooperation”. This, he added, “is part of the deliberate positioning of the German government.” He also shared that Germany sees India as a key partner.

The key announcement precedes the visit of the German Foreign Minister Annalena Baerbock,  whose visited to Delhi is slated for December 5-6. Her visit will see her exchange views with Indian counterpart S Jaishankar. The meeting will reviews the bilateral relationship. In 2023, the German Chancellor Olaf Scholz’s bilateral visit is also anticipated.

Indo-German Bilateral Partnership on Energy

In May this year, Scholz concluded with Prime Minister Narendra Modi the announcement of providing support of €10 billion by 2030. This is under the purview of Indo-German partnership for green and sustainable development. The current announcement of €1 billion for Indian projects is part of this initiative finalised then.

The said development projects are to come up across India as Germany is eager to cover the entire country, Ackermann said. KfW Development Bank will be providing the lines of credit at very cheap interest, that will vary from 2.7% to 3.2% for development projects in states like Tamil Nadu and Meghalaya.

Discussions between the two countries of India and Germany placed a premium on development policy and brought concrete agreements and projects to the table. The new initiatives will look at curbing greenhouse gas emissions or will help adapt to climate change.