AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
On 31 August 2009, the Japan Bank for International Cooperation (JBIC) signed a USD 650 million overseas investment loan agreement in project financing with Dutch Marubeni LP Holding B.V. The company is a subsidiary of Japanese Marubeni Corporation.
The loan finances the company's purchase a 30% interest in the Esperanza copper mine in Chile, which will start production of copper concentrate in the end of 2010. Notably JBIC provided a loan totaling around USD 1 billion for the Esperanza Copper Mine Development Project in May 2009.
In this context the Bank stated: 'JBIC will keep providing financial support for facilitating the development and acquisition of interests in important natural resources through project structuring and risk-taking functions that draw on its various financial facilities.'
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.
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