The Japan Bank for International Cooperation (JBIC) has entered into strategic loan agreements with NTPC Renewable Energy and NHPC to help develop renewable energy projects across India.

The loans for the public sector undertakings are co-financed with Sumitomo Mitsui Banking Corporation and the Bank of Fukuoka, with JBIC providing 60% of the total financing.

NTPC Renewable Energy has secured a loan of JPY15 billion (~$99.11 million) to fund its renewable energy projects, with JBIC contributing JPY9 billion (~$59.46 million).

NHPC has secured a loan of JPY20 billion (~$132.15 million) to fund its renewable energy projects. JBIC will directly fund this loan’s JPY12 billion (~$79.28 million).

The loan agreements include NTPC receiving JPY15 billion (~$99.11 million) to install environmental equipment at its power projects, with JBIC’s contribution to the loan amount at JPY9 billion (~$59.46 million).

JBIC will also provide the guarantee for the portion co-financed by the private financial institutions.

The loans were provided to the companies under JBIC’s Global action for Reconciling Economic growth and Environmental preservation (GREEN) program. Under the initiative, JBIC finances projects aimed at preserving the global environment and reducing greenhouse gas emissions while taking into account propagating advanced Japanese environmental technologies around the world.

Recently, NTPC Limited invited offers from banks and financial institutions to raise ₹50 billion (~$672 million) as rupee term loans.

The loan proceeds would be utilized towards capital expenditure for the ongoing and new capacity addition programs, renewable energy projects, and buying out the Government of India’s equity stake in public sector undertakings under the government’s disinvestment program, refinancing loans, and general corporate purposes.

Earlier, SJVN  secured a green financing loan of ₹9.15 billion (~$111.2 million) from the Japan Bank for International Cooperation to construct two solar power projects in India. JBIC provided 60% of the debt financing for these projects, while the remaining balance will be covered by Japanese commercial banks, namely MUFG Bank and San-in Godo Bank.

Last October, JBIC and the Government of India signed an agreement to establish a $600 million India-Japan Fund to address climate and environmental challenges. The fund was to focus on environmental preservation in India, encompassing sectors such as renewable energy, electric vehicles, waste management, and water management projects. The government of India will contribute 49% of the target corpus, and JBIC will contribute 51%.