Government-owned NHPC is reportedly reaching out to banks in Japan as it seeks cheaper funds to fuel its expansion into solar power.

What Happened? The Indian state-backed hydropower firm is looking to borrow up to ₹5,000 crore in yen-denominated loans from Japanese Banks, finance director Rajendra Prasad Goyal told Bloomberg.

The director said the company in talks with Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and the Japan Bank for International Cooperation.

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NHPC believes it can access cheaper loans through yen-denominated debt instead of borrowing domestically, as it aims to keep financing costs low to compete in India’s solar market, where it is expanding its green energy portfolio with 1.2 gigawatts of solar projects.

Cheaper capital would also keep the firm well-positioned to bid for solar projects in intense bidding auctions.

The hydroelectric company is looking to borrow debt with at least a 10-year tenure to suit its cashflows, Goyal told the business publication. It would be the firm’s first overseas debt in four years.

Price Action: Shares of NHPC were up 0.44% at ₹45.60 around noon on Thursday.

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