ANNOUNCEMENT 12 Nov 2014In November 2014, the governments of Japan and Korea announced new support for the overseas expansion of domestic firms.
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The Japan Bank for International Cooperation press release: Project Financing for Donggi-Senoro LNG Project in Indonesia. Available at: http://www.jbic.go.jp/en/information/press/press-2014/1114-31983
JBIC information concerning overseas investment loans: http://www.jbic.go.jp/en/finance/investment
On 12 November 2014 the Japan Bank for International Cooperation (JBIC) signed a USD 763 million overseas investment loan agreement with Indonesian Donggi-Senoro LNG in project financing. The company is jointly owned by Japanese Mitsubishi Corporation, Korean Korea Gas Corporation, Indonesian Pertamina and Indonesian Medco Energi Internasional. The loan will support Donggi-Senoro LNG's construction of an LNG plant in Indonesia. At a later stage, operating the plant and selling LNG.
On a separate occasion JBIC signed two loan agreements with Japanese Mitsubishi Corporation for the same project (see related measure).
The Korean governmental Export-Import Bank of Korea (ExImBank of Korea) together with a number of commercial banks will co-finance the project. The ExImBank of Korea will partially guarantee the commercial banks' co-financed portion, whilst Japanese governmental Nippon Export and Investment Insurance will insure the amount.
JBIC's 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.