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On 26 January 2010, the Japan Bank for International Corporation (JBIC) signed a JPY 15.6 billion (approx. USD 174 million) export loan agreement with the Korea Development Bank (KDB).
The loan will finance the purchase of power generation equipment by the Japanese companies Mitsubishi Heavy Industries, Ltd. and Mitsubishi Corporation for a by-product gas combined-cycle power plant project. The plant will be constructed by Korean POSCO Power, Co. Ltd. This loan agreement falls under the JBIC-KDB agreement signed in September 2009 seeking to expand trade activities between the two countries. See related measure.
In this context JBIC stated: 'JBIC will continue to support Japanese firms for maintaining and improving their international competitiveness by drawing on its various financial instruments.'
JBIC provides export loans to overseas importers or foreign banks. Such loans are obtained if it finances the purchase of Japanese machinery, equipment or technology in specific eligible sectors. The Bank hereto stated that these loans are intended to 'positively contribute to Japanese companies'. Further information can be found on the Bank's website under export 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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