AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Financial assistance in foreign market
On 16 December 2015 the Japan Bank for International Cooperation (JBIC) signed two overseas investment loan agreements in project financing with Singaporean entities Diamond LNG Shipping 1 Pte. (DLS1) and Diamond LNG Shipping 1 Pte. (DLS2). Both entities are jointly owned by Japanese companies Mitsubishi Corporation (50%) and Nippon Yusen Kabushiki Kaisha (50%). Each loan agreement amounts to a maximum JPY 14,560 million (USD ca. 123.60 million) and is part of JBIC's overseas investment loan scheme.
The loan is intended to finance the companies' procurement of tankers transporting LNG produced mainly by the Cameron LNG project in the US. Several Japanese companies are participating in the Cameron LNG project. In this context the Bank stated: '...JBIC will continue to financially support the promotion of acquisition and development of energy resources by Japanese companies, by drawing on its various financial facilities and schemes...'.
Notably the Cameron LNG project was financed by JBIC with similar loans in August 2014 and March 2016, see related measure.
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.
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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