AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The overseas investment loan agreement between JBIC and Agility Trans West Line Limited (ATWL) has an approximate value of GBP 1 billion (USD 1.55 billion). Additionally, the governmental agency Nippon Export and Import Insurance (NEXI) provided an Overseas Untied Loan Insurance for a co-finances loan of approximately GDP 2.2 billion (USD 3.41 billion) financed by a number of Japanese and foreign private financial institutions. The UK based company Agility Trans West Line is a joint venture established by Japanese Hitachi Ltd and John Laing Investments Limited from the UK. Hitachi Ltd notably has equity stakes in ATWL.
In this context, JBIC noted that: "Hitachi plans to take this opportunity to construct a new rolling stock manufacturing and assembly center in the UK."
As part of the Rolling Stock Public Private Partnership project, the loan finances the joint venture company's activities in the production of 369 high-speed trains, which will be manufactured by Hitachi. These high-speed trains will be leased to the train operator of Great Western Main Line with maintenance service for a period of 30 years. Additionally, ATWL will develop railway depots for maintenance in connection with the aforementioned project. Additionally, as part of the project undertaken by ATWL, 369 high-speed trains will be produced by Hitachi Ltd. As such, this loan also directly facilitates the Japanese company's exports to the United Kingdom.
In this context, JBIC stated: "JBIC will continue to support overseas infrastructure business activities of Japanese firms, and contribute to maintaining and improving the international competitiveness of Japanese industries by utilizing a range of financial facilities and schemes for structuring projects, and by performing risk-assuming functions."
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.
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.
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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