A $100 million CTF loan to the Indian province of Himachal Pradesh to develop nearly 11 GW of hydropower in the region by 2032 to mitigate environmental challenges while fueling inclusive green development.


Even though the Indian province of Himachal Pradesh (HP) has been a leader in human development over recent decades, unsustainable natural resource use, public funding dependent development, and a basket of detrimental climate impacts remain considerable challenges. The HP government recognizes that to continue to develop towards its goals, HP will need to shift away from public expenditure created opportunities to a more robust private sector, job growth for its youth, and a transition to more environmentally sound resource use.

Himachal Pradesh envisions leveraging its unique suitability for hydropower to meet its developmental priorities. The government of India has secured $100 million from IBRD resources to finance the first in a series of two Development Policy Loans (DPLs), and is seeking an additional $100 million of Clean Technology Fund resources for the second DPL in the series.

Objectives and Outputs:

New hydropower development in Himachal Pradesh will provide clean energy to fuel inclusive green economic and social growth. While saving greenhouse gas emissions to meet national emission reduction goals, the loan will increase energy security of the province, develop local industry, create jobs, and reduce electrify prices. Increasing hydropower capacity reduces coal imports and improves local air quality by saving pollution from new thermal generation plants.

The loan is anticipated to facilitate 2832 MW of hydropower capacity by 2019 with a net carbon savings of 20.72 MT CO2 equivalent over the project lifetime. The institutional and policy reform from the project will benefit the province and nation more broadly by facilitating existing and future hydropower projects. Hydropower will serve as balancing power source to contrast the variable nature of wind and solar energy, thereby accelerating the growth of renewable energy across the country. Power reliability is intended to improve significantly with this development.

Overall, the Himachal Pradesh Environmentally Sustainable Development Policy Loan will reduce poverty, increase climate resilience, foster economic development, promote responsible environmental stewardship, increase energy security, and help streamline the political and social pathways necessary for hydropower development in India.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

IBRD Project Portal

Project Details
Cover Note | Project Document | Proposed Decision
Approved on November 1, 2013 (Approved Decision)
Approved amount(s):
USD 100.0 million

Original Project Proposal
Project Proposal | Presentation 

Request for Release of a First Tranche of Funding
Approved on August 17, 2012
Approved amount(s):
USD 100.0 million

Comments and Responses:
France (August 10, 2012)