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JBIC and CDB contribute loans to thermal power plants projects in India

According to a new report released on Thursday, 84 lenders – both national and international – provided loans totaling Rs 7.62 lakh crore to thermal power projects in India with capacities of 1,000 MW and above between 2005 and 2022. The report on Thermal Power Plants in India by the Centre for Financial Accountability follows the conclusion of COP27 on November 20 in Sharm-El-Sheikh, Egypt, where India announced its Long-Term Low Emissions and Development Strategies. The report examined data from 140 thermal power plants (TPPs) built between 2005 and 2022 in 16 states/UTs, with 122 completed and 18 under construction. During this period, the 122 plants account for nearly 196 GW of the total commissioned capacity of 204 GW, with 122 GW owned publicly and 73 GW privately.

This year, the Reserve Bank of India (RBI) issued a discussion paper emphasizing the importance of adhering to the Task Force on Climate-Related Financial Disclosures (TCFD), an international standard for disclosing climate-related risks. Out of the Rs 7.12 lakh crore loans sanctioned domestically by Power Finance Corporation (PFC) and Rural Electrification Corporation Ltd, the State Bank of India account for 35.21 percent of the loans given by public sector banks to 55 thermal power plants (REC). In India, private banks have lent Rs 0.278 lakh crore to coal-fired thermal power plants. The most money has been lent by ICICI Bank at Rs 0.073 lakh crore, followed by Axis Bank at Rs 0.071 lakh crore and HDFC at Rs 0.0615 lakh crore.

Tamil Nadu received the most loans, amounting to Rs 0.847 lakh crore, followed by Telangana, Maharashtra, and Madhya Pradesh. According to the report, 22 international financial institutions have made loans in India totaling Rs 0.503 lakh crore. Japan Bank for International Cooperation contributed Rs 0.0734 lakh crore, while China Development Bank contributed Rs 0.0641 lakh crore. JBIC, JICA, China Exim Bank, Mizuho Corporate Bank, Ltd, Industrial & Commercial Bank of China, and other Japanese and Chinese financial institutions dominate the share of loans going to India’s coal sector.
While thermal capacity addition has slowed in recent years, the total coal supply, both coking, and non-coking have increased from 808 to 955 million tonnes in the last five years. Because of the risks involved, financial institutions are increasingly avoiding lending to TPPs. The Federal Bank was the first commercial bank to announce a coal exit policy, according to a recently released report, Coal vs RE — Investment Report. Sarvodaya Small Finance Bank recently announced that it no longer funds coal-related projects.


The report recorded a total of 22 international financial institutions, who have ..

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