- Region: Asia
- Untied Loans
May 30, 2013
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed today, upon the Prime Minister of India, Manmohan Singh's visit in Japan, an untied loan agreement for offering a credit line amounting up to 90 million U.S. dollars (of which JBIC's portion is 45 million U.S. dollars) with State Bank of India (SBI), the largest state-owned commercial bank in terms of assets and incorporated in India. The credit line is cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU; lead arranger) and Sumitomo Mitsui Banking Corporation (SMBC) with JBIC providing a partial guarantee for the cofinanced portion.
- This credit line is extended under GREEN operations*1 to finance environment-related projects focusing on energy efficiency and renewable energy in India, and is thus expected to contribute to the promotion of greenhouse gas (GHG) emission reduction.
- The Government of India has pledged to reduce greenhouse gas emissions by 20-25% per unit of GDP below its 2005 level by the year 2020. Further, under the medium and long-term environment policy, National Action Plan on Climate Change (NAPCC), the government is carrying out a variety of activities. Under these circumstances, JBIC's loan is expected not only to help reduce GHG emission in India, but also to promote the Indian government's environmental policy.
- SBI, the largest state-owned commercial bank in India in terms of assets established in 1806, is the prominent lender in the power sector and project financing in India. In recent years, SBI has been strengthening support for clean energy and other environment-related projects. Since the 1990s, JBIC and SBI have built up close cooperative ties through loans to support machinery and equipment exports from Japan to India. Recently, JBIC has signed a memorandum of understanding (MOU) on an institutional framework for supporting mid-tier enterprises and small and medium-sized enterprises to expand business operations into India.*2 This loan will further strengthen relations between the two institutions, amid the expectations for various cooperative opportunities in infrastructure and other sectors in the near future.
- JBIC will continue to support global environmental preservation efforts, in cooperation with such overseas local financial institutions, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.