IMPLEMENTATION LEVEL

NFI

AFFECTED FLOW

Outflow (subsidised)

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 28 Mar 2014 | Removal date: open ended
Still in force

Financial assistance in foreign market

The loan agreement between JBIC and Sarulla Operations LTD has a maximum value of USD 492 million in project financing. The loan is co-financed by a number of private financial institutions. The total co-financing amount is approximately USD 1.17 billion. JBIC will in this context provide a political risk guarantee for the co-financed portion.

The Sarulla Operations LTD is incorporated in the Cayman Islands. The Japanese companies ITOCHU Corporation and Kyushu Electric Power Co. have equity stakes in the company alongside a number of other investors.

The loan finances the Sarulla Geothermal Power Plant Project in Indonesia. In this project, Sarulla Operations LTD will build and operate a geothermal power plant in Indonesia and sell the electricity generated by the plant to an Indonesian state-owned power utility company.

In this context, JBIC stated: "JBIC will continue to support overseas infrastructure business activities of Japanese companies by drawing on a variety of financial facilities and schemes for structuring projects and by performing its risk-assuming function."

Project finance 
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.

AFFECTED COUNTRIES

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