AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The overseas investment loan agreement in project financing between JBIC and Indonesian PT. Supreme Energy Muara Laboh has a maximum value of USD 198 million. Additionally, the loan is cofinanced by a number of private financial institutions amounting to a maximum USD 439 million. The governmental agency Nippon Export and Investment Insurance will provide an insurance for the cofinanced portion. The Indonesian company is invested in by the Japanese company Sumitomo Corporation. The loan finances the Muara Laboh Geothermal Power Project. In this project, the Indonesian company will construct, own and operate a geothermal power plant and in doing so sell the generated electricity to the Indonesian state-owned company PT. PLN.
In this context, the JBIC stated: "This loan supports an overseas infrastructure project in which Japanese company not only participate as investors, but also operate and maintain a power plant over a long period of time, using advanced Japanese technologies. This loan thereby contributes to maintaining and strengthening the international competitiveness of Japanese industries."
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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