AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The overseas investment loan agreement between JBIC and Dutch Carioca MV27 B.V. was signed on 17 July 2014. The loan agreement has a maximum value of USD 564 million in project financing. The Japanese companies MODEC, Inc., Mitsui & Co., Ltd, Mitsui O.S.K. Lines, Ltd and Marubeni Corporation all have equity stakes in the Dutch company.
The loan finances a project in which the Dutch company will provide a long-term FPSO (floating production, storage, and offloading) chartering service to Guara B.V. a consortium operating in Carioca area located off the coast of Brazil. The FPSO will be built by Japanese MODEC. An FPSO is a floating vessel utilised for the first stage of processing crude oil produced at oil wells.
In this context, JBIC stated: "this loan will lead to the strengthening of the international competitiveness of Japanese companies in offshore resource development by helping them acquire and improve technologies, management practices, and know-how regarding the operation of ultra-deepwater FPSO systems."
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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