Japan Bank for International Cooperation (JBIC), in December 2010, had said it was 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 was also shifting its focus on the Indian market from China following political tensions with its Asian neighbour. Since, Japan Bank for International Cooperation signed $200mn loan with ICICI India to finance renewable energy, energy efficiency projects in India.
In February this year, JBIC and Sumitomo Mitsui Banking Corp. (SMBC) completed a USD 300 million loan deal for ICICI Bank. JBIC provided USD 180 million, while SMBC and Bank of Tokyo-Mitsubishi UFJ were funding USD 120 million. The commercial portion was guaranteed by JBIC.
Increasing its exposure further to the renewable energy markets in India, JBIC on monday said it will offer a credit of 50 million U.S dollars through ICICI Bank to finance imports of renewable energy products. While the JBIC portion will total up to 30 million U.S. dollars, the loan will be cofinanced by private financial institutions. The overall cofinancing amounts to the equivalent of 50 million U.S. dollars. This will be the first credit line to be offered by JBIC that specializes in supporting the export of renewable energy-related equipment.
This credit line will support the export of renewable energy-related equipment by Japanese firms to India, thereby contributing to maintaining and improving the international competitiveness of Japanese industries.The credit facility will be operational for two years, JBIC’s country representative, Shin Oya said, adding, however, importers will get a longer repayment period of up to 18 years.
The equipment may include products based on solar photovoltaic power, solar thermal energy, wind energy, and geothermal energy, etc. from Japan.