PFC Signs JPY 60 Billion Loan Agreement with JBIC to Fund Clean Energy Projects
Power Finance Corporation (PFC) has signed a JPY 60 billion loan agreement with Japan Bank for International Cooperation (JBIC) and partner banks to fund renewable energy and next-generation energy supply projects in India, including a bamboo-based bioethanol production in Assam by Assam Bio Ethanol (ABEPL).
September 01, 2025. By Mrinmoy Dey
The loan is based on the credit line that JBIC signed with PFC in January 2025, for renewable energy and next-generation energy supply projects and energy-saving power generation and heat supply projects.
The loan is intended to provide the Indian company Assam Bio Ethanol (ABEPL), through PFC, with the funds necessary for a biofuel production and power generation project in the state of Assam, India. In this project, ABEPL will produce biofuel in Golaghat district, Assam, using bamboo cultivated in the Northeastern states of India and sell bioethanol, its main product, for use in gasoline blends, JBIC said in a statement.
In India, the economic growth rate is high, and the demand for electric power is expected to grow. At the same time, however, the country, which is the world's third-largest emitter of CO2, has an urgent need to address climate change. In the National Policy on Biofuels, which was formulated in 2018 and revised in 2022, the government of India aims to achieve a 20 percent bioethanol blend in gasoline (E20) to replace fossil fuels and contribute toward climate change mitigation.
The government also released the Roadmap for Ethanol Blending in India 2020–25 in June 2021, which outlines plans to roll out E20 nationwide from 2025. In addition, India is promoting the “Act East Policy” as a key initiative, with a focus on the development of the geopolitically important Northeastern states, including the state of Assam, and strengthening ties with neighbouring countries.
The governments of Japan and India have agreed to lead the prosperity and stability of the Indo-Pacific region through policy and cooperation under the “Free and Open Indo-Pacific” concept advocated by Japan. This project is positioned by the Indian government as a large-scale and significant initiative in the Northeastern region.
The loan enables bamboo farmers to improve their earnings through the industrial use of bamboo, a regional speciality material in Northeastern India, including the state of Assam, thereby contributing toward raising income levels among workers in the primary sector in the region. In addition, as ethanol refined from bamboo has a lower environmental impact than conventional ethanol, this loan will also support the government of India's initiatives for preserving the global environment, the statement noted.
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