AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The overseas investment loan agreement between JBIC and Laotian Nam Ngiep 1 Power Company Limited was signed on 15 August 2014. The loan agreement has a maximum value of USD 200 million in project financing. The Japanese company The Kansai Electric Power Co., Inc. has, among others, invested in the Laotian company.
The loan finances the construction and operation of a hydropower plant in Lao. The electricity generated is sold to Electricity Generating Authority of Thailand and the state-owned Laotian company Electricite du Laos for a period of 27 years.
In this context, the Bank stated: "The loan supports financially the participation of Japanese companies in overseas infrastructure projects and will contribute to maintaining and strengthening the international competitiveness of Japanese industries..."
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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