Loan for Power Finance Corporation Limited of India Based on Credit Line
Supporting Biofuel Production and Power Generation Project in India under GREEN Operations

• Region: Asia
• Environment
• Untied Loans

1. The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed today a loan agreement amounting to up to JPY60 billion, of which JBIC’s portion is JPY36 billion, with Power Finance Corporation Limited (PFC), a government financial institution in India, taking the opportunity of Prime Minister Narendra Modi’s visit to Japan. The loan is based on the credit line^*1 that JBIC signed with PFC on January 15, 2025, for renewable energy and next-generation energy supply projects and energy-saving power generation and heat supply projects. The loan is co-financed with Sumitomo Mitsui Banking Corporation, The Joyo Bank, Ltd., Kansai Mirai Bank, Limited, and Kiraboshi Bank, Ltd. JBIC will also provide a guarantee for the portion co-financed by the private financial institutions.
     
2. The loan is extended as part of JBIC’s GREEN operations^*2 and is intended to provide the Indian company Assam Bio Ethanol Private Limited (ABEPL) through PFC with the funds necessary for a biofuel production and power generation project in the state of Assam, India. In this project, ABEPL will produce biofuel in Golaghat district, Assam, using bamboo cultivated in the Northeastern states of India and sell bioethanol, its main product, for use in gasoline blends.
     
3. In India, the economic growth rate is high, and the demand for electric power is expected to grow. At the same time, however, the country, which is the world's third largest emitter of CO2, has an urgent need to address climate change. In the National Policy on Biofuels, which was formulated in 2018 and revised in 2022, the government of India aims to achieve a 20% bioethanol blend in gasoline (E20) to replace fossil fuels and contribute toward climate change mitigation. The government also released the Roadmap for Ethanol Blending in India 2020–25 in June 2021, which outlines plans to roll out E20 nationwide from 2025. In addition, India is promoting the “Act East Policy” as a key initiative, with a focus on the development of the geopolitically important Northeastern states, including the state of Assam, and strengthening ties with neighboring countries. The governments of Japan and India have agreed to lead the prosperity and stability of the Indo-Pacific region through the policy and the cooperation under the “Free and Open Indo-Pacific” concept advocated by Japan. This project is positioned by the Indian government as a large-scale and significant initiative in the Northeastern region.
     
4. The loan enables bamboo farmers to improve their earnings through the industrial use of bamboo, a regional specialty material in Northeastern India including the state of Assam, thereby contributing toward raising income levels among workers in the primary sector in the region. In addition, as ethanol refined from bamboo has a lower environmental impact than conventional ethanol, this loan will also support the government of India's initiatives for preserving the global environment.
     
5. As Japan's policy-based financial institution, JBIC will continue to provide financial support for efforts to preserve the global environment and address social issues, by drawing on its various financial facilities and schemes for structuring projects and by performing its risk-assuming function.
     

Note

1. *1 
   See Press Release on January 16, 2025.
2. *2 
   See Announcement on July 2, 2018.