Japan and India are further deepening their energy cooperation. According to a report by the Japan Economic News on July 2, the Japan International Cooperation Bank (JBIC) will collaborate with financial institutions such as Mitsubishi UFJ Bank (SMBC) to provide financing of up to 80 billion yen (approximately $492 million) for an Indian high-voltage DC transmission project. This funding aims to support India's power grid development, enhance energy security, and promote the use of renewable energy.
This project will be the first initiative under the POWERR Asia framework. POWERR Asia is an Asian energy cooperation framework proposed by Japan's Prime Minister Maevia Takumi, and is led by JBIC.
According to reports, this cooperation is expected to be officially announced during the Japan-India summit meeting in New Delhi, India, on July 2. Ms. Koichi Maya and Indian Prime Minister Narendra Modi will also announce a series of energy cooperation measures, including support for the use of renewable energy sources in India to produce hydrogen and ammonia. They will also issue statements regarding economic security cooperation in areas such as semiconductors and pharmaceuticals.
This financing will be organized by the Japan Bank for International Cooperation, together with Mitsubishi UFJ Bank and Kansai Future Bank. The project aims to support India’s state-owned power transmission company, Indra Power Systems, in constructing an HVDC project. The project is scheduled to be operational by 2029, with a total investment of approximately 550 billion yen.
The project will connect a large renewable energy base being built in the Khavda desert region of Gujarat, western India, to the central city of Nagpur. The transmission line is approximately 1200 kilometers long.
According to the Japan Economic News, many areas in India with solar and wind energy resources are located far from major power consumption centers. The existing transmission capacity is insufficient, and electricity suffers significant losses during long-distance transmission. HVDC technology is more suitable for long-distance, large-capacity power transmission and is considered effective in improving the utilization of renewable energy sources. Hitachi Energy, a subsidiary of Hitachi Group in Japan, is highly competitive in this field. Its Indian subsidiary has already received orders for some power transmission equipment in the region.
As one of the world's major oil-consuming countries, India relies on imports for approximately 90% of its crude oil. In recent years, the United States has continuously pressured India to reduce imports of Russian crude oil. The instability in the Middle East has also increased the risks associated with energy supply, putting pressure on inflation and the rupee exchange rate in India.
