Export Credit Line for ICICI Bank of India First Credit Line to Support Export of Renewable Energy-Related Equipment
Environment , International Business Development NR/2012-21
July 2, 2012
July 2, 2012
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed on June 29 a general agreement with ICICI Bank Limited (ICICI Bank)*1, India's largest private sector bank, for extending an export credit line*2 totaling up to 30 million U.S. dollars (JBIC portion) for financing renewable energy projects. The loan will be cofinanced by private financial institutions. The overall cofinancing amounts to the equivalent of 50 million U.S. dollars. This will be the first credit line to be offered by JBIC that specializes in supporting the export of renewable energy-related equipment.
- This credit line is intended to provide medium and long-term U.S. dollar or yen-denominated credit, to finance through ICICI Bank, the purchase of renewable energy related equipment (including solar photovoltaic power, solar thermal energy, wind energy, and geothermal energy, etc.) from Japan, thereby supporting expansion of exports to India.
- As demand for electric power has been increasing, driven by the recent burgeoning economic growth, the Indian government has been making efforts to promote a broader utilization of renewable energy for power generation. It has a plan to increase the power generation capacity of renewable energy to 41.4 GW by the year 2017. This credit line will support the export of renewable energy-related equipment by Japanese firms to India, thereby contributing to maintaining and improving the international competitiveness of Japanese industries.
- JBIC and ICICI Bank have built up close cooperative ties through loan commitments that are/were designed to support the following initiatives: the development of the local support industry which is significant for Japanese firms operating in India as well; trade finance during the financial crisis; renewable energy and energy efficiency projects; and export of thermal power plant facilities to India. In partnership with such Indian domestic banks, JBIC is committed to continue to support the deployment of Japanese business activities to India, including those in the renewable energy sector, by drawing on its range of financial facilities and schemes for structuring projects and performing risk-assuming functions.
- *1 ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank and the second largest bank in the country, with consolidated total assets of 119 billion U.S. dollars at March 31, 2012.
- *2 An export credit line is a form of export credit in which JBIC makes a commitment of the maximum amount of credit to be extended to its client (foreign banks or other entities) to finance exports of machinery, equipment and services from Japan. This renewable energy-related export credit line has a feature of being able to offer the maximum repayment term for 18 years in accordance with the Sector Understanding on Export Credits of Renewable Energies and Water Projects under the OECD Arrangements on Officially Supported Export Credits.