PTI Report: Federal Bank would cease financing thermal power projects by 2030

10 Oct 2023 , 09:09 AM

According to a senior bank official, Federal Bank, Kerala’s largest and oldest private sector lender, will fully discontinue funding thermal generating projects by 2030.

By 2025, the bank with its Kochi headquarters will reduce its exposure to the thermal power sector by half as a first step toward its decarbonization strategy.

A total of seven to eight projects, largely in the solar and wind sectors, make up the bank’s 5,083 crore exposure to the green power industry.

‘By 2030, we plan to fully stop subsidizing thermal power projects and other traditional energy sources. We will reduce our exposure to this polluting sector by half by 2025 as a first step toward realizing our decarbonization initiatives, Ashutosh Khajuria, the bank’s top mentor, told PTI today.

The bank’s green loan book currently stands at 5,083 crore and its sanctioned book at 7,490 crore. Khajuria, a former executive director of the bank who just retired, stated, ‘We see our green book crossing 13,000 crore by 2025.’

He is optimistic that the bank would maintain its 20% credit disbursal growth this fiscal year, powered by housing, business, and gold loans.

According to Khajuria, 21% of the $107 billion in remittances the nation received last year went through the bank’s channels.

Despite a slight decline in inflows brought on by recent exchange rate volatility, market share has not changed, and the year will end with over $100 billion in inflows.

Additionally, according to Khajuria, the IFC would soon be able to fund the bank to the tune of Rs. 980 crore because all necessary clearances, including those from the RBI, are in place.

IFC, the World Bank’s investment arm, has been waiting for the RBI’s approval to invest 980 crore in the bank.

According to Khajuria, the bank successfully completed a Qualified Institutional Placement (QIP) offering for 3,000 crore in July.

For feedback and suggestions, write to us at [e-mail]