AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The overseas investment loan agreement in project financing between JBIC and Indonesian PT. Bhumi Jati Power has a maximum value of USD 1.678 billion. The Japanese companies Sumitomo Corporation and The Kansai Electric Power Company, among others, have stakes in the Indonesian company. The loan finances a project in which PT. Bhumi Jati Power will construct, own and operate an ultra-supercritical power plant and in doing so sell the generated electricity to the Indonesian state-owned company PT. PLN.
A similar loan financing a power generation project with investments from the Japanese company Sumitomo Corporation was signed in January 2017, see related measure.
In this context, the Bank stated: "This loan supports an overseas infrastructure project in which Japanese businesses will participate as investors and become involved in its operation and management for a long time by taking advantage of the country's advanced technology. It will contribute to maintaining and strengthening the international competitiveness of Japanese industries. The loan is also in line with the Japanese government's strategy of promoting Japanese involvement in projects that include the design, construction, operation and management of infrastructure".
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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