Power Finance Corporation (PFC), India's largest government-owned non-banking financial company, has taken a significant step towards promoting clean energy projects in the country. The company recently signed a loan agreement worth 60 billion Japanese Yen (approximately ₹3,500 crore) with the Japan Bank for International Cooperation (JBIC) to finance various clean energy initiatives across India.

Key Highlights of the Loan Agreement

• Loan Amount: 60 billion Japanese Yen (approx. ₹3,500 crore)
• Purpose: Financing clean energy projects in India
• Initiative: Part of JBIC's Global Action for Reconciling Economic Growth and Environmental Preservation
• Co-financing: Support from Sumitomo Mitsui Banking Corporation and other Japanese banks

Signing Ceremony

The loan agreement was signed in Tokyo by PFC Chairman and Managing Director Parminder Chopra and JBIC Governor Nobumitsu Hayashi, marking a significant milestone in Indo-Japanese cooperation in the energy sector.

Focus on Bio-Ethanol Production

A portion of the funding will be allocated to support the establishment of Assam Bio Ethanol Pvt Ltd's second-generation bio-ethanol and chemicals plant in Assam. This innovative project will utilize bamboo as feedstock, promoting sustainable and eco-friendly fuel production.

PFC's Role in India's Power Sector

Power Finance Corporation, operating under the Ministry of Power, serves as the principal financial institution for India's power sector. As the country's largest government-owned NBFC by asset size, PFC plays a crucial role in funding and developing energy infrastructure projects across the nation.

Implications for India's Clean Energy Goals

This substantial loan agreement between PFC and JBIC underscores the growing international support for India's clean energy ambitions. By facilitating investments in various clean energy projects, including bio-ethanol production, PFC is contributing to the country's efforts to reduce its carbon footprint and promote sustainable development.

The collaboration between PFC and JBIC is expected to accelerate the implementation of clean energy initiatives, fostering economic growth while addressing environmental concerns. As India continues to prioritize renewable and clean energy sources, such international partnerships will be instrumental in achieving its energy transition goals.

Power Finance Corporation (PFC), a leading player in India's power sector financing, has taken a significant step towards enhancing the country's power transmission infrastructure. The company has incorporated a new wholly-owned subsidiary named 'SR AND ER Power Transmission Ltd.' to spearhead an ambitious Inter-Regional Grid Strengthening Project.

New Subsidiary Formation

PFC Consulting Limited (PFCCL), a wholly-owned subsidiary of Power Finance Corporation, has established SR AND ER Power Transmission Limited as a Special Purpose Vehicle (SPV). This new entity is tasked with the development of the "Inter-Regional Strengthening between SR Grid and ER Grid" project, aimed at bolstering the power transmission capabilities between Southern and Eastern regions of India.

Ministry of Power's Role

The formation of this subsidiary comes in response to a directive from the Ministry of Power (MoP). According to a Gazette Notification (No. CG-DL-E-24052025-263324) dated May 21, 2025, the Ministry appointed PFC Consulting Limited as the Bid Process Coordinator (BPC) for selecting a Transmission Service Provider (TSP) through a Tariff Based Competitive Bidding Process.

Purpose and Responsibilities

The newly formed SPV will undertake crucial preparatory activities for the transmission project, including:

1. Conducting surveys and preparing reports
2. Initiating the process of land acquisition
3. Seeking forest clearance, if required

These steps are essential in laying the groundwork for the successful implementation of the Inter-Regional Grid Strengthening Project.

Future Transfer and Development

It's important to note that SR AND ER Power Transmission Ltd. is not intended to be a permanent subsidiary of PFC. After the completion of the bidding process, the SPV will be transferred to the successful bidder. This winning bidder, selected through an international competitive bidding process, will then be responsible for developing the project further.

Implications for India's Power Sector

This initiative underscores PFC's commitment to strengthening India's power transmission infrastructure. The Inter-Regional Grid Strengthening Project between the Southern and Eastern grids is expected to enhance power distribution efficiency and reliability across these regions, potentially benefiting millions of consumers and industries.

The formation of SR AND ER Power Transmission Ltd. marks a crucial step in realizing this ambitious project, reflecting the ongoing efforts to modernize and expand India's power sector infrastructure.