ANNOUNCEMENT 29 Feb 2016In February 2016, the government of Japan announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
The Japan Bank for International Cooperation press release of 1 March 2016: Buyer's Credit for Bangladesh Power Development Board: http://www.jbic.go.jp/en/information/press/press-2015/0301-46827
JBIC information on export loans: http://www.jbic.go.jp/en/finance/export
On 29 February 2016 the Japan Bank for International Cooperation (JBIC) signed a buyer's credit loan agreement amounting to JPY 18.5 billion (approx. USD 172.32 million) with the Bangladesh Power Development Board (BPDB). Additionally the commercial bank Tokyo-Mitsubishi UFJ, Ltd. will co-finance the buyer's credit loan with the Japanese governmental agency Nippon Export and Investment Insurance (NEXI) providing insurance for the co-financed portion.
The loan finances the BPDB's purchase of various facilities for the construction of a 400 MW gas-fired combined cycle power plant in Bangladesh. This includes the purchase of gas- and steam turbines from Japanese companies.
In this context JBIC stated: 'This loan is expected to support Bangladesh's economic development by realizing steady power supply, and, at the same time, will contribute to maintaining and strengthening the international competitiveness of Japanese industries.'
Buyer's credit agreements
JBIC provides direct loans named buyer's credit to overseas importers. Loans are obtained if it finances the purchase of Japanese machinery, equipment or technology in specific eligible sectors. The Bank hereto stated that these loans are intended to 'positively contribute to Japanese companies'. Further information can be found on the Bank's website under export 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.
Affected trading partners are identified based on UN Comtrade's import data from 2014. According to UN Comtrade, no trading partner exceeded the GTA threshold of USD 1 million on the affected tariff lines. Thus, no affected trading partners have been identified.