India's energy sector is undergoing significant changes as the country aims to meet its growing electricity demand while pursuing ambitious renewable energy targets. The World Bank has been collaborating with the Indian government and various states to improve the efficiency, reliability, and financial sustainability of India's electricity distribution companies (DISCOMs).
"Since power distribution falls under the jurisdiction of each state in India, the World Bank has collaborated not only with the national government of India but also with states and regions to enhance DISCOMs' efficiency, reliability, and financial sustainability," according to a statement from the World Bank.
The challenges faced by DISCOMs include aging infrastructure, financial instability, and integrating renewable energy sources into their networks. "Key improvements needed by DISCOMs include: (1) strengthening infrastructure to modernize aging grids and enhance network resilience," among other measures outlined in a recent report.
The World Bank has been actively involved in several projects aimed at addressing these issues. Since 2014, it has focused on assisting state governments in modernizing grids in Andhra Pradesh, Rajasthan, Jharkhand, West Bengal, and six northeastern states. "Since 2016, the World Bank has supported India in enhancing the financial and operational health of its electricity distribution system," according to project details provided by the organization.
Three major projects have received substantial support from the World Bank:
1. The North Eastern Region Power System Project benefited over 45 million citizens across Assam, Manipur, Mizoram, Meghalaya, Tripura, and Nagaland.
2. The Jharkhand Power System Improvement Project improved services for nearly 5 million users.
3. The West Bengal Electricity Distribution Grid Modernization Project enhanced infrastructure for approximately 90 million people.
These initiatives are part of broader efforts by India to transition towards cleaner energy sources while ensuring reliable power supply across all regions. Despite progress in renewable energy capacity additions—India added more solar and wind capacity than ever before in 2024—challenges remain regarding coal dependency and grid integration.
Looking ahead, "the World Bank will focus its support on financing expansion... leveraging digital technologies... offering technical assistance... supporting state-level initiatives..." as part of ongoing efforts toward a sustainable energy transition for India.