The Japan Bank for International Cooperation (JBIC) has signed a loan agreement amounting to up to 25.5 billion yen (US$170 million) with Power Finance Corporation (PFC), a government financial institution in India. JBIC’s portion is 13.5 billion yen.

The loan is based on the credit line that JBIC signed with PFC in July 2022 for renewable energy projects and energy-efficient power generation, as well a heat supply projects. The general agreement was for a 30 billion yen credit line, of which JBIC’s portion is 18 billion yen.

The loan is co-financed with Sumitomo Mitsui Banking Corporation, Bank of Yokohama, Shiga Bank, and the Bank of Fukuoka. JBIC will also provide a guarantee for the portion co-financed by the private financial institutions.   

The loan is extended as part of JBIC’s GREEN operations, and is intended to provide the Indian company Ostro Kannada Power Private Limited, through PFC, with the funds necessary for a wind farm project in the state of Karnataka.

This is the third GREEN loan via PFC based on the credit line. In March 2023 there was a 2.6 billion yen loan, together with SMBC, to provide Indian firm Antony Lara Renewable Energy with the funds necessary for a waste-to-energy project in the state of Maharashtra. And in August 2023 there was a 1.8 billion yen loan with SMBC to provide KPC Gas Power Corporation with funds for a waste-to-energy project in the state of Karnataka.

India is experiencing high economic growth, but it still relies heavily on coal for power generation, with nearly 80% of its energy demand being met by fossil fuels, JBIC notes.

In August 2021, Prime Minister Narendra Modi pledged that India would become energy-independent by 2047, the centenary of the country’s independence, as part of the Self-Reliant India campaign. Also, at COP26 in November 2021, Modi committed to boosting the country’s non-fossil energy capacity to 500 gigawatts by 2030.