JBIC and PFC Sign ¥60 Billion Loan Agreement to Finance India’s Largest Bio-Ethanol Project in Assam
- Peeush Srivastava
- Aug 29
- 2 min read
Tokyo/New Delhi, August 29, 2025: The Japan Bank for International Cooperation (JBIC) and Power Finance Corporation Ltd. (PFC) have signed a landmark JPY 60 billion (approx. ₹3,500 crore) loan agreement to finance India’s largest second-generation bio-ethanol project in Assam. The signing took place on the sidelines of Prime Minister Narendra Modi’s visit to Japan, marking a new chapter in India–Japan clean energy cooperation.
The loan, of which JBIC’s portion is JPY 36 billion, is co-financed with Sumitomo Mitsui Banking Corporation (SMBC), The Joyo Bank, Ltd., Kansai Mirai Bank, Limited, and Kiraboshi Bank, Ltd. JBIC will also guarantee the private financial institutions’ portion. This financing is part of JBIC’s GREEN (Global Action for Reconciling Economic Growth and Environmental Preservation) initiative.
Assam Bio-Ethanol Project: Bamboo-Based Renewable Energy
Funds will flow through PFC to Assam Bio Ethanol Private Limited (ABEPL) to establish a biofuel production and power generation facility in Golaghat, Assam.
The project will produce 49,000 tonnes per annum of bioethanol as its main product, using bamboo cultivated in Northeast India as feedstock.
This will be India’s largest bio-ethanol plant, directly supporting the country’s E20 ethanol blending target under the National Policy on Biofuels (2018, revised 2022).
Ethanol refined from bamboo has a lower environmental impact compared to conventional ethanol, reinforcing India’s climate change mitigation goals.
Geopolitical Significance: Strengthening India–Japan Ties
Advances India’s Act East Policy through investment in the Northeast.
Aligns with the Free and Open Indo-Pacific vision advocated by Japan.
Positions India and Japan as partners driving regional prosperity and stability.
Environmental Impact: Clean Energy & Climate Goals
Promotes renewable bioethanol production from bamboo, a sustainable and fast-regenerating resource.
Supports India’s E20 nationwide rollout from 2025, reducing reliance on fossil fuels.
Contributes to CO₂ emissions reduction and global environmental preservation.
Social Impact: Rural Empowerment & Inclusive Growth
Enhances income opportunities for bamboo farmers across Northeast India.
Creates local jobs and strengthens primary sector livelihoods.
Drives regional development while supporting social equity through sustainable industry.
Strategic Context
India, the world’s third-largest emitter of CO₂, faces the dual challenge of meeting rising energy demand and addressing climate change. With the Roadmap for Ethanol Blending in India 2020–25, the government aims to implement 20% ethanol blending (E20) nationwide from 2025.
By leveraging bamboo as a green resource, this project aligns India’s climate action commitments with its energy security needs, while also fulfilling the Act East Policy’s regional development priorities.
About JBIC and PFC
The Japan Bank for International Cooperation (JBIC) is Japan’s policy-based financial institution that supports overseas projects addressing environmental and social issues. Through financing, guarantees, and risk-sharing, JBIC promotes sustainable global growth.
The Power Finance Corporation Ltd. (PFC) is India’s largest government-owned non-banking financial company (NBFC) under the Ministry of Power. It serves as the principal financial institution for India’s power sector, financing projects across renewable energy, power generation, transmission, and distribution.
This India–Japan clean energy partnership not only sets a precedent for sustainable investments in renewable energy but also underscores the shared vision of both nations in driving climate action, rural empowerment, and regional prosperity.