Panchabuta had mentioned in December last year that, Japan Bank for International Cooperation (JBIC) is looking at providing equity funding to private sector projects in India instead of debt support for public sector entities. The principal Japanese overseas funding agency is also shifting its focus on the Indian market from China following political tensions with its Asian neighbour.
Earlier in February this year, Panchabuta had mentioned that the Japan Bank for International Cooperation (JBIC) that is looking at providing equity funding to private sector projects in India instead of debt support for public sector entities. The JBIC has earlier talked about intention to create a green investment fund not limited to India but mainly for India, with other partners such as the International Finance Corporation.
According to a release by the Bank, The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe) signed on March 31 an untied loan agreement with ICICI Bank Limited (ICICI) in India. This loan was made to ICICI Bank to finance renewable energy, energy efficiency and other environment-related projects in India. This is the first loan provided in the Asian region for GREEN operations.The loan, totaling 200 million U.S. dollars, was co-financed with Sumitomo Mitsui Banking Corporation (SMBC) (lead arranger).
The Government of India set a numerical target of reducing carbon dioxide (CO2) emissions by 20–25% from the 2005 level by 2020 and is accelerating efforts to achieve the targets set in each core national mission, including National Solar Mission, under the National Action Plan on Climate Change, a medium-and-long-term road map detailing how India plans to move forward in combating climate change. Against this background, this loan will help India combat global warming by reducing greenhouse gas (GHG) emissions and advance the Indian government’s environmental policy, while providing, as a result of fair business competition, opportunities for advanced Japanese technologies to contribute in these regards.
ICICI is the second largest private-sector bank in India, with extensive business transactions with many of the country’s leading firms, and is involved in many domestic infrastructure projects. To date, JBIC and ICICI have developed close cooperative ties through the funding of supporting industries dealing with Japanese affiliates and subsidiaries operating in India; the progress in CDM projects; and trade financing to uphold trade amid the global financial crisis. Collaboration with a domestic Indian bank enabled by this loan is expected to help identify and formulate promising projects from earlier stages.
JBIC will help efforts to preserve the global environment by diffusing advanced technologies.