AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
The loan agreements between JBIC and Thai Khanom Electricity Generating Company Limited has a maximum value of USD 187 million in project financing. The Japanese companies Mitsubishi Corporation and Tokyo Electric Power Company, Inc. have indirect equity stakes in the Thai company. The loan finances the Khanom Electricity Generating Company's Khanom 4 gas-fired combined cycle Power Generation Project. In this project, the Thai company will build and operate a gas-fired combined cycle power plant and sell the generated electricity to Thai Electricity Generating Authority for a period of 25 years.
In this context, JBIC stated: "In this Project, TEPCO provides technical support to the building, operation and maintenance of the power plant by sending its technical staff. The loan will, in addition to ensuring a stable supply of electricity to southern Thailand, support overseas deployment of business for Japanese companies, thereby contributing to maintaining and improving the international competitiveness of Japanese industry."
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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