With $135 million in new funding, India plans to expand the development of renewable energy projects and private sector energy efficiency investments.

The initiative, called the India Second Renewable Energy Project, supports government initiatives to reduce power supply shortages and greenhouse gas emissions by investing in small-scale power generation by tapping the country's vast hydro resources, estimated at 10,000 megawatts of small hydro capacity. To date, about 500 megawatts have been commissioned, with another 500 megawatts underway.

Malaine Manzo, a World Bank senior operations officer in the South Asia Energy Unit, said energy sector development is critical in fostering continued economic growth and reducing poverty in the country.

"The project will help India meet the growing demand for electric power in an environmentally friendly way. It will also mobilize private sector capital and management expertise in the sector, diversify energy sources, and reduce, albeit in a moderate way, India's heavy reliance on fossil fuels," Manzo said.

Follow the money

The funding comes from the World Bank ($130 million) and the Global Environment Facility ($5 million grant). The Global Environment Facility is a $2.75 billion financial mechanism that provides grant and concessional funding for recipient countries for projects and activities that address climate change, biological diversity, international waters, and depletion of the ozone layer.

The World Bank shares the responsibility for implementing GEF activities with the United Nations Development Program and United Nations Environment Program.