Poverty reduction is a hot topic in current academic research. Using a sample of Shanghai and Shenzhen A-share listed enterprises in China, this paper investigates whether firms participate in targeted poverty relief project can reduce debt financing costs. The study finds that enterprises' participation in targeted poverty alleviation effectively reduces debt financing costs. Mechanism tests further demonstrate that such participation diminishes the information asymmetry between internal and external enterprises, enhances brand value and reputation, attracts ESG investors to invest, and ultimately results in reduced debt financing costs. Furthermore, private enterprises' participation in targeted poverty alleviation is more effective in reducing their debt financing costs compared with state-owned enterprises. These findings highlight the win-win nature of enterprises' involvement in targeted poverty alleviation, offering valuable insights for developing countries to sustainably eliminate poverty.