The Japan Bank for International Cooperation ( JBIC ) has signed a general agreement to set up a credit line totalling up to 120 billion yen ( US$770 million ) with Power Finance Corporation ( PFC ), an Indian government-owned company, which specializes in offering financial support to the power and infrastructure sector.

Through the credit line, the JBIC supports efforts made by the government of India and PFC – an important institution for realizing the government’s electricity policy – to preserve the global environment.

The credit line, of which the JBIC’s portion is 72 billion yen, is intended to finance, through PFC, the necessary funds for energy projects in India, such as renewable and next-generation energy supply as well as energy-saving power generation and heat supply, as part of GREEN ( Global action for Reconciling Economic growth and Environmental preservation ) operations.

The JBIC notes that 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 carbon dioxide, has an urgent need to address climate change.

The government of India pledged on the country’s Independence Day in August 2021 that India will become energy independent by 2047; and, at COP26 in November 2021, it committed to realizing carbon neutrality by 2070. It also aspires to achieve 50% cumulative electric power generation from non-fossil-fuel-based energy resources by 2030 as its nationally determined contributions ( or NDCs ), an action plan to address climate change under the Paris agreement.

Under these circumstances, the government is introducing renewable energy and promoting countermeasures against climate change, such as the enhancement of green hydrogen production capacity and the dissemination of energy efficiency technologies. In addition, with the launch of the Clean India Mission, the government is focusing on waste-to-energy throughout India.
 

This is the second credit line to PFC, following the first one set up in 2022. At that time, the JBIC signed on a general agreement with PFC for a credit line totalling up to 30 billion yen, of which the JBIC’s portion was 18 billion yen.