ANNOUNCEMENT 24 Jun 2010In June 2010, the government of Japan announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
The Japan Bank for International Cooperation press release of 25 June 2010: Buyer's Credit for Jubail Refinery Project in Saudi Arabia: http://www.jbic.go.jp/en/information/press/press-2010/0625-7256
On 24 June 2010, the Japan Bank for International Cooperation (JBIC) signed a buyer's credit loan agreement with Saudi Aramco Total Refining and Petrochemical Company (SATORP) amounting to a maximum USD 400 million in project financing. Additionally, the commercial bank Tokyo-Mitsubishi UFJ, Ltd. will co-finance the loan with the Japanese governmental agency Nippon Export and Investment. Insurance (NEXI) providing insurance for the co-financed portion. SATORP is jointly owned by French Total S.A. and the Saudi Arabian Oil Company (Saudi Aramco).
The loan is approved in return for the company's purchase of Japanese goods. More specifically SATORP will purchase a delayed coker from Japanese Chiyoda Corporation and various equipment from IHI Corporation; Elliott Ebara Turbomachinery Corporation; Kobe Steel, Ltd.; and Hitachi Zosen Corporation for their oil refinery project.
In this context JBIC stated: 'To create export opportunities for Japanese industries in Middle Eastern and African countries, JBIC will continue its support for Japanese overseas business activities by drawing on its expertise, risk-assuming function, and wide range of financial instruments.'
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.