AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
The overseas investment loan agreement between JBIC and Government of Lao People's Democratic Republic was signed on 3 September 2014. The loan has a maximum value of USD 34.5 million.
The loan enables the Government to invest in the Laotian Nam Ngiep 1 Power Company Limited and in doing so supporting the Nam Ngiep 1 Hydro Power Plant Project undertaken by the company. The Japanese company The Kansai Electric Power Co., Inc. has, among others, equity stakes in the Laotian company.
In this project, Nam Ngiep 1 Power Company Limited will construct and operate 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..."
Notably, JBIC signed a similar loan in August 2014 for the same project, see related state act.
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.
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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