India

Demand for electricity in India is high. Until now, however, the majority of its energy – around two thirds – was generated from fossil fuels, especially coal. Many of the power stations are ageing and inefficient, meaning that they produce a lot of pollutants. The subcontinent currently accounts for around 7% of the world’s greenhouse gas emissions, thereby harming the environment and the climate. Nonetheless, approximately one tenth of current electricity demand remains unmet, even as the economy and the population are growing.

The Indian government wants to close this energy gap while simultaneously enabling environmentally responsible and climate-friendly growth. This is why the country is increasingly investing in renewables. By 2022, the intention is to produce an additional 175,000 megawatts of electricity from biomass, solar and wind energy. On behalf of the German Federal Government, KfW is providing intensive support to India to help it can achieve this target.

As early as 2015, the two countries agreed to form an Indo-German solar partnership, making investments worth EUR 1 billion to facilitate the expansion of solar power. KfW is promoting the construction of solar parks and the installation of solar panels on the roofs of businesses and private homes throughout the country. The expansion of other renewable energy sources – like hydropower – is also being promoted.

To ensure that the environmentally friendly energy can reach people and businesses, KfW is contributing over EUR 1 billion to the Green Energy Corridor Project to connect solar, wind and hydropower plants to the Indian electricity grid. At the same time, this helps to improve energy efficiency by supporting Indian companies and households in making better use of energy in production processes and residential buildings, and in reducing energy losses.

The majority of people in India still live in rural areas, but the urban population is continuously growing. Today, around 30% of Indians live in the urban centres, and this figure will reach 50% by 2050. The development of infrastructure in the cities is therefore very important for India. Urban transport in particular has placed a heavy burden on the environment and the climate, with its high levels of pollutant emissions.

This is why, in November 2019, Germany and India formed the Green Urban Mobility Partnership to promote and advance environmentally friendly transport systems in India’s cities. This includes expanding metro and underground lines in Mumbai and other cities, improving bus travel, switching to electric buses, and creating better links between the various transport systems. This will increase the incentives for people to use local public transport – at present, only 7% of city residents make use of it.

In relation to urban development, KfW also promotes waste water disposal and rainwater management. In coastal regions, this reduces the climate-related risks associated with heavy rainfall and flooding.

Project information urban development and transport systems (PDF, 182 KB, non-accessible)

The natural environment and agriculture are under severe pressure in India: 60% of arable land and around 40% of forested areas are classed as degraded and at risk of being destroyed. Climate change, which is linked to droughts and floods, threatens to exacerbate these trends and deprive people of their livelihoods to an even greater extent. Even now, around 270 million of the people in India classed as extremely poor live in rural areas and make a living from farming.

KfW is helping India to reduce the risks associated with climate change, especially in rural areas, and to safeguard people’s income streams. Climate-resilient, environmentally friendly and agroecological farming methods are being promoted to facilitate this. These include organic seed treatment, fertilisation and pest control. Support is also being provided to help people market their products. In the project areas, this could more than double the income from important crops in some cases. In addition, KfW is promoting the sustainable management of forest ecosystems.

Project information - Agroecology (PDF, 220 KB, non-accessible)

During the coronavirus crisis, KfW has provided India with emergency aid. In cooperation with the United Nations Children’s Fund, UNICEF, the country received a total of EUR 40 million to combat and cushion the effects of the pandemic – especially for women and children. Among other things, this involved providing a seamless cold chain to facilitate the storage and transport of vaccines. To make this happen, KfW funded the purchase of refrigeration and freezing equipment for around 1,000 locations. The equipment included small fridges for health stations and walk-in fridges to store larger quantities. The procurement of PCR tests, personal protective equipment for medical staff and measures to improve oxygen supply are also being financed. As well as helping in the short term, these measures will play a role in strengthening India’s healthcare system over the long run.

KfW supported a comprehensive social security programme on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) by issuing a low-interest loan for EUR 460 million. For USD 23 billion, the Indian government distributes food to around 800 million people and cash transfers to around 320 million beneficiaries. These measures also benefit the approximately 9 million migrant workers. Furthermore, separate health insurance is being set up for staff in the health sector.