PFC Secures 120 Billion Yen Loan from JBIC to Support Renewable Energy Projects

Power Finance Corporation (PFC), a government-owned financial institution, has entered into an agreement with the Japan Bank for International Cooperation (JBIC) to secure a ¥120 billion (approximately ₹6,600 crore) loan for renewable energy initiatives. The agreement, signed on Wednesday, marks the largest green financing deal JBIC has ever executed with an Indian company.

Power Finance Corporation Ltd was trading at ₹437.65, as of 10:28 AM on January 17,  up 0.52% today, with a 20.08% drop over 6 months but an 11.49% gain over the past year.

Loan Details and Allocation

Under the agreement, JBIC will provide ¥72 billion, while the remaining amount will be funded by commercial banks. The long-term loan, with a tenor of up to 20 years, will be utilized by PFC to finance renewable energy projects as part of India’s transition to non-fossil fuel-based energy sources.

JBIC’s Green Initiative

The funding comes under JBIC’s “Global Action for Reconciling Economic Growth and Environmental Preservation” (GREEN) initiative, which supports projects aimed at reducing greenhouse gas emissions and preserving the global environment. The initiative aligns with India’s commitment to achieving net zero carbon emissions and transitioning to cleaner energy sources.

Agreement Signing

The loan agreement was signed by Parminder Chopra, Chairman and Managing Director of PFC, and Ogawa Kazunori, Senior Managing Director of JBIC. Takashi Ariyoshi, Minister and Deputy Chief of Mission at the Embassy of Japan, and Shibuya Atsuki, Deputy Director General at JBIC, were present at the signing.

Focus on Renewable Energy

PFC, a Maharatna public sector enterprise, is focusing on expanding its green energy portfolio. Its FY24 annual report talks about plans to grow its lending by maintaining its share in conventional sectors while diversifying into emerging power and infrastructure projects. The company aims to establish itself as a nodal agency for India’s net zero goals.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing