AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
On 16 May 2011, the Japan Bank for International Cooperation (JBIC) signed an overseas loan agreement totalling a maximum USD 400 million with Shuweihat Asia Power Company P.J.S.C. (SAPCO) in project financing. The company is incorporated in the United Arab Emirates (UAE) and is established by Japanese Sumitomo Corporation, Korea Electric Power Corporation and the Abu Dhabi Water and Electricity Authority.
The loan finances the company's Shuweihat S3 Natural Gas-Fired Combined Thermal Power Generation Project. In this project SAPCO will construct a natural gas-fired combined thermal power plant near Abu Dhabi to later sell the generated electricity.
In this context the Bank stated: 'JBIC will continue to help develop closer economic relations between Japan and the UAE while, as an official financial institution, supporting Japanese industries' overseas business development by performing its functions including project structuring and performing a risk-taking function.'
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.
According to UN Comtrade, no trading partner exceeded the GTA threshold of USD 1 million on the affected tariff lines in the year prior to the intervention. Thus, no affected trading partners have been identified.
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