New Delhi: State-run Power Finance Corporation has signed an agreement with Japan Bank for International Cooperation for a loan of JPY 120 billion or ₹6,500 crore for renewable energy projects.
Under the agreement JBIC will provide funding of JPY 72 billion, and the balance would be funded by commercial banks, said a statement from PFC. The funds would be used by PFC in financing renewable energy projects in India.
“JBIC provided this long term facility to PFC under JBIC's initiative titled 'Global action for Reconciling Economic growth and Environmental preservation' (GREEN), wherein JBIC finance projects aimed at preserving the global environment -- such as projects that significantly reduce greenhouse gas (GHG) emissions,” PFC said.
It said the deal is the largest green financing agreement ever executed by JBIC with any company in India.
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The loan agreement was signed by Parminder Chopra, Chairman and Managing Director, PFC and Ogawa Kazunori, senior managing director, JBIC.
“We have successfully utilised the first credit line from JBIC in year 2024. This new credit line is 4 times larger than the previous one and provides a longer tenor of up to 20 years. Promoting non-fossil fuel-based energy is a key priority for the Government of India. With the support of international lenders like JBIC, PFC will play a pivotal role in advancing this vision.” said Parminder Chopra, CMD, PFC.
OGAWA Kazunori, senior managing director, JBIC said: “India is a strategically important partner for Japan. As a Japanese government financial institution, JBIC is committed to supporting various policy initiatives aimed at sustainable economic development in India. Through closer cooperation with PFC, we would like to focus on identifying and developing wider variety of projects that contribute to the strengthening and developing of Japan-India bilateral cooperation."
In line with the government’s ambitious energy transition a net zero goals, the Maharatna financing company is also expanding its presence in the green energy space.
In its annual report for FY24, PFC said that it would focus on providing financial solutions for infrastructure projects across various sectors, including renewable energy. As part of its long-term business strategy PFC would grow lending by maintaining share in conventional sectors and expanding portfolio to emerging power sectors as well as infrastructure sectors. It alsp plans to “position to become the nodal agency for net-zero, to pursue immediate dispensations in the interim to lower the cost of funds”, said the annual report.
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