AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
On March 16, 2018, the Japanese International Cooperation Agency (JICA) provided a $946 million USD ODA loan agreement to the Government of Manilla for the establishment the Metro Manila Subway Line, the first subway system in the Philippines. The loan agreement states that the funds given by JICA's STEP program ($946 million USD) will go to funding Japanese corporations and services that will provide civil engineering, railway procurement, vehicle procurement, and consulting services.
The conditions of the loan are a 0.1% interest loan for the bulk of the ODA agreement, a 0.01% interest rate on consulting services and a redemption period of 40 years. According to the Government of the Republic of the Philippines and JICA, the Japanese funds will come into effect in March of 2018 and the construction of the subway lines will be completed by September 2025.
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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