- Region: Asia
- Manufacturing and Services
- Overseas Investment Loans
July 28, 2009
- The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1 signed today two loan agreements for an aggregate amount of up to US$153.7 million with L&T-MHI Boilers Private Limited (LTMB) and L&T-MHI Turbine Generators Private Limited (LTMT), two joint venture companies established primarily by Mitsubishi Heavy Industries (MHI) and Larsen & Toubro Limited (L&T), one of the largest heavy machinery manufacturers in India. This is the first project financed under JBIC's Leading Investment to Future Environment (LIFE) Initiative*2.
- In this business project, LTMB and LTMT will manufacture high-efficiency, high-performance boilers and steam turbines for power generation by using advanced supercritical pressure technology*3 provided by MHI. The boilers will be manufactured in the city of Hazira in the state of Gujarat and sold in the Indian market. The proceeds of the loan will primarily be used for the construction of manufacturing facilities.
- The Indian economy has continued to grow at a pace of 6-9% in recent years. While this has increased power demand, a lagging growth in power supply is causing chronic power shortages. The 11th five-year economic plan drawn up by the government of India envisages large-scale expansion in the capacity of the power sector. There are especially high expectations for building supercritical coal-fired power plants that can achieve a stable power supply using the abundance of coal in India while decreasing the burden on the environment. Under these circumstances, this business project by LTMB and LTMT is expected to contribute to removing bottlenecks in India's power infrastructure and improving the country's investment climate and economic growth.
- JBIC has provided a broad range of support for Japanese trade and investment activities in India, including a direct loan to this joint venture business project between a Japanese firm and a leading Indian partner. JBIC is prepared to provide financial support to the overseas business operations of Japanese firms which have advanced technologies, including those in fast-growing markets like India.
- *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
- *2 See information on March 23, 2009, "Establishing Leading Investment to Future Environment (LIFE) Initiative".
- *3 Supercritical pressure technology increased the efficiency in power generation by increasing the pressure and temperature of steam sent from the boiler to the power turbine. The adoption of this technology will reduce the amount of fuel and carbon dioxide emissions compared with ordinary coal-fired power plants.