Global Trade Alert

On 30 March 2010, the Japan Bank for International Cooperation (JBIC) signed an USD 497 million (maximum) overseas investment loan agreement with Dutch P&M Drilling International B.V. (P&M) in project financing. Additionally, the Japanese Bank of Tokyo-Mitsubishi UFJ, Ltd. will co-finance this loan, which JBIC partially guarantee.
The Japanese company Mitsui & Co. and Brazilian state-owned Petróleo Brasileiro S.A. (Petrobras) have equity stakes in P&M.
The loan finances the ultra-deepwater oil drillship project, which will build an ultra-deepwater drilling rig and to hereafter provide drilling services in Brazil. Additionally, the Japanese company Japan Drilling Company, Ltd. (JDC) is participating in the project as a technical consultant to Mitsui & Co. In this context, JDC aims to prospectively participate in other ultra-deepwater oil drilling projects undertaken by Petrobras.
In this context JBIC stated: 'JBIC is committed to providing effective support for overseas Japanese business activities by drawing on its range of financial instruments and schemes in response to their concrete needs.'
 
Project finance
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.