The Japan Bank for International Cooperation (JBIC) is providing a guarantee for a US$380mn syndicated loan for NTPC, India's largest power producer.
The loan is being provided by SMBC, Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ, and the Tokyo branch of Soci&eaute;té Générale
It will finance the capital investment of the 1,980MW Barh super thermal power project by NTPC. The electricity generated by this project is to be supplied to the north-western part of India, including Delhi and Mumbai, where many Japanese companies are operating and will potentially make further investments.
India has an economic growth rate of between 7-9% per year, attracting the interest of Japanese firms. However, the country's lack of adequate infrastructure, particularly the provision of electricity, is slowing investment in the country.
JBIC's annual survey on overseas business operations by Japanese manufacturing companies ranked India as the most promising overseas investment destination for Japanese companies" over the long term.
This project is also set to use advanced technology that will reduce the level of coal usage and lower carbon dioxide emissions, compared to standard coal-based thermal power plants.
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