Power Finance Corporation (PFC), India’s leading power sector financial institution, has joined forces with the Japan Bank for International Cooperation (JBIC) in a major green financing initiative aimed at accelerating the clean energy transition in India. The two organizations signed a loan agreement worth 60 billion Japanese Yen, approximately ₹3,500 crore, to fund projects aligned with sustainable development goals.

Strengthening Indo-Japanese Climate Cooperation

The agreement was finalized in Tokyo on Friday, where PFC Chairperson and Managing Director Parminder Chopra and JBIC Governor Nobumitsu Hayashi led the signing ceremony. The deal is part of JBIC’s broader GREEN (Global Action for Reconciling Economic Growth and Environmental Preservation) initiative, which supports environmental projects around the world through targeted financing partnerships.

Also present at the event was Rajiv Kannan, Managing Executive Director and Head of India Division at Sumitomo Mitsui Banking Corporation (SMBC), which has extended co-financing support along with other Japanese financial institutions.

The collaboration underscores the deepening economic ties between India and Japan, particularly in the area of climate finance and green infrastructure development.

Strategic Investment in Bio-Ethanol in Assam

A portion of the loan has been earmarked to fund a second-generation bio-ethanol and chemicals plant in Assam. The facility will be developed by Assam Bio Ethanol Pvt Ltd and will utilize bamboo as its primary feedstock. This project is not only significant for its renewable energy credentials but also for its potential to advance India’s self-sufficiency in clean fuel production.

By using bamboo, a fast-growing and locally abundant resource, the plant aims to reduce dependence on fossil fuels and cut emissions from traditional biomass burning and petrochemical alternatives. The initiative is expected to support regional employment, promote innovation in green chemistry, and contribute to India’s broader bioenergy strategy.

PFC’s Role in India’s Clean Energy Future

As the country’s largest government-owned non-banking financial company (NBFC) by asset size, Power Finance Corporation plays a pivotal role in mobilizing capital for the Indian power sector. Operating under the Ministry of Power, PFC has increasingly focused on aligning its investments with India’s decarbonization goals, and this loan agreement marks another step in that direction.

By securing green funding from JBIC and its Japanese banking partners, PFC is positioning itself as a central player in the global push toward cleaner, more sustainable energy systems.

A Model for Future Green Financing

This partnership between PFC and JBIC represents a model of international cooperation where capital, technology, and climate goals converge. It reflects growing momentum behind green financing frameworks that prioritize both environmental outcomes and long-term economic development.

With projects like the Assam bio-ethanol plant, the loan also illustrates how targeted investments in innovative technologies can yield regional and national benefits, ranging from emissions reductions to industrial resilience.

As India pursues its commitments under the Paris Agreement and aims for net zero emissions by 2070, deals like this will be instrumental in bridging the financing gap for clean energy infrastructure.

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