AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The overseas investment loan agreement between JBIC and British WMR JV Investco Limited was signed on 8 August 2014. The loan agreement has a maximum value of GBP 172.5 million (USD 289.37 million) in project financing. The company is jointly owned by Japanese Marubeni Corporation and with British Green Investment Bank Plc.
The loan supports the Japanese company, through WMR JV Investco Limited, to acquire 25% of the British offshore wind power generation company Westermost Rough Limited from Danish DONG Energy Wind Power A/S. Through this acquisition, Marubeni will construct and operate Westermost Rough Offshore Wind Farm jointly with DONG. Following the completion of the project, the parties will sell the electric power generated. The wind farm is located off the coast if Great Britain.
In this context, the Bank stated: "... JBIC's support for long-term overseas projects of Japanese companies by providing Pound Sterling-denominated long-term loans will reduce the exchange rate risk of foreign currency borrowings by project implementers, and thereby contribute to maintaining and strengthening the international competitiveness of Japanese companies."
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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