Global Trade Alert

On 10 September 2015 the Japan Bank for International Cooperation (JBIC) signed an aggregated (maximum) USD 252 million overseas investment loan agreement with Dutch Tartaruga MV29 B.V. (MV29) in project financing. The company is owned by the Japanese companies MODEC, Inc. (29.4%), Mitsui & Co., Ltd. (32.4%), Mitsui O.S.K. Lines, Ltd. (20.6%) and Marubeni Corporation (17.6%).
 
The loan finances a crude oil exploration project (long-term FPSO system) in which MV29 will extend its services to state-owned Brazilian enterprise Petróleo Brasileiro S.A. for the development of the Tartaruga Verde and Tartaruga Mestica oil fields near the city of Macaé, Brazil.
MODEC will build the FPSO unit, a vessel that separates the gas and water as well as the storage and offloading of crude oil, whilst MV29 will provide leasing and operation and maintenance services to the Brazilian enterprise for 20 years.
 
In this context the bank stated: "Therefore, this loan will lead to the strengthening the international competitiveness of Japanese companies in offshore resource development by helping them acquire and improve technologies, management practices, and knowhow regarding the operation of FPSO systems..."
 
Project Financing
Project financing loans include preferential terms such as repayments being solely made from the project's cash flow generation and secured on the basis of the project's assets alone. As such the loan agreement is tied to the project's finances and not the company in question.
 
Overseas Investment loans
JBIC provides direct loans named overseas investment loans to Japanese companies, overseas affiliates or joint ventures where Japanese companies hold equity interests and governments or financial institutions partying with such overseas affiliates. Loans support projects in specific sectors or with a specific purpose of interest to Japan. Further information can be found on the Bank's website under overseas investment loans.
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.