- Region: Asia
- Infrastructures
- Environment
- Untied Loans
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The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed on August 17 a loan agreement amounting to up to approximately JPY1.8 billion, of which JBIC’s portion is approximately JPY1.1 billion, with Power Finance Corporation Limited (PFC), a government financial institution in India. 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 and heat supply projects*1. The loan is co-financed with Sumitomo Mitsui Banking Corporation. JBIC will also provide a guarantee for the portion co-financed by the private financial institution.
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The loan is provided as part of JBIC’s GREEN operations*2, and it is intended to provide Indian company KPC Gas Power Corporation Limited, through PFC, with the funds necessary for a waste-to-energy project in the state of Karnataka, India. This is the second GREEN loan for PFC based on the credit line, following a loan in March 2023*3.
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The economic growth rate is high in India, but the country is relying heavily on coal for power generation sources, with nearly 80% of its energy demand being met by fossil fuels. Given such circumstances, at COP26 in November 2021, Prime Minister Modi committed to boosting the non-fossil energy capacity to 500GW by 2030, among others. On another front, repercussions of the urbanization for the growing population, such as mounting untreated wastes, have become a social problem in India, where wastes are under-recycled or underutilized to generate electricity and the proportion of wastes being disposed in landfills is larger than that in developed countries. The Government of India continues to address hygiene problems in the country and announced Swachh Bharat Mission - Urban 2.0, the second phase of its Clean India Mission in October 2021 to promote such waste processing facilities as waste-to-energy plants, with the aim of making urban India “Garbage Free.” JBIC supports the Government of India’s initiatives that contribute toward global environmental preservation with the loan.
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As Japan’s policy-based financial institution, JBIC will continue to financially support initiatives for sustainable development, including global environmental preservation efforts, through collaboration with such overseas government institutions by drawing on its various financial facilities and schemes and by performing its risk-assuming function.
Note
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- *2
- *3