AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The overseas investment loan agreement between JBIC and ITOCHU Coal Americas Inc. has a value of USD 619 million. The company is a U.S. subsidiary of the Japanese company ITOCHU Corporation.
The loan finances the subsidiary's acquisition of 20% of equity shares in Drummond International LLC. Notably, Drummond International LLC owns certain coal mines and transport infrastructure assets in Colombia. Additionally, the loan finances ITOCHU Coal Americas participation in a thermal coal mining project in Colombia benefitting from a share of the anticipated 30 million tonne coal output for the year 2012.
In this context, the Bank stated: "In this loan, JBIC assumes the political risk of the Republic of Colombia by performing the role of reducing local risks involved in overseas business expansion of Japanese firms."
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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