CHENNAI (Reuters) - India’s largest electricity generator NTPC Ltd said on Wednesday it would borrow 50 billion yen ($478 million) from Japanese banks to fund the installation of emission-cutting equipment and green energy projects.
“The loan proceeds will be utilized by NTPC Ltd, the PSU under Ministry of Power, for funding its capex for Flue Gas Desulphurization (FGD) & Renewable Energy projects,” government-run NTPC said in a statement.
Flue Gas Desulphurization (FGD) units cut emissions of sulphur dioxides - which are linked to lung diseases and acid rain - from coal-fired power plants.
Japan Bank for International Co-operation (JBIC) will provide 60% of the loan under its Global Action for Reconciling Economic growth and Environment preservation (GREEN) initiative, NTPC said in a statement.
Other Japanese commercial banks, including Sumitomo Mitsui Banking Corp, San-In Godo Bank Ltd and Nanto Bank Ltd, will extend the rest of the loan amount.
India has a phased plan for plants to comply with emission norms, with deadlines extending to the end of December 2022.
Data from the Central Electricity Authority’s (CEA) website shows over 60% of coal-fired utilities have not yet awarded bids to install the emission cutting equipment.
Nearly three quarters of the plants that have awarded bids for installation of FGDs are NTPC-run plants, the data shows.
The Association of Power Producers (APP), an industry lobby group, estimates that installation of FGDs takes at least 27 months, putting over 100 GW of coal-fired utilities - most of which are operated by private companies and provincial governments - at risk of non-compliance.
Over a sixth of the plants have already missed a deadline to install FGDs, according to the CEA data.
India, currently struggling with some of the worst air pollution levels on earth, has already extended the deadline for its utilities to meet emissions standards twice, after extensive lobbying by the APP.
($1 = 104.7000 yen)
Reporting by Sudarshan Varadhan; Editing by Nick Tattersall
Our Standards: The Thomson Reuters Trust Principles.