ANNOUNCEMENT 18 Dec 2012
On 18 December 2012, JBIC signed an overseas investment loan agreement with Ichthys LNG Pty Ltd in project financing.
NUMBER OF INTERVENTIONS
The Japan Bank for International Cooperation, press release of 18 December 2012, Project Financing for Ichthys LNG Project in Australia: http://www.jbic.go.jp/en/information/press/press-2012/1218-7495
Nippon Export and Investment Insurance (NEXI), press release of 18 December 2012, オーストラリア向けイクシスプロジェクト （資源エネルギー総合保険／海外事業資金貸付保険の引受: http://nexi.go.jp/topics/newsrelease/004619.html
JBIC information on overseas investment loans: http://www.jbic.go.jp/en/finance/investment
The overseas investment loan agreement between JBIC and Australian Ichthys LNG Pty Ltd has a maximum value of USD 5 billion in project financing. The Australian company is a joint venture between the Japanese companies INPEX CORPORATION, Osaka Gas Co., Ltd., Tokyo Gas Co., Ltd., TOHO GAS Co., Ltd. and Chubu Electric Power Co., Inc. alongside French TOTAL S.A.
Additionally, the governmental organisation Nippon Export and Investment Insurance (NEXI) will provide an Overseas business fund lending insurance - resource energy general insurance covering approximately USD 2.75 billion of the loans provided by a number of private financial institutions to the project. The insurance covers an emergency risk 100% and credit risk 97.5%.
The loan finances the LNG project in Australia, which will develop the Ichthys Gas and Condensate Field, to then transport and sell the produced LNG, liquefied petroleum gas and condensate. The Japanese companies collectively own around 70% interest in the project.
In this context, the Bank clarified: "JBIC will continue to actively support Japanese businesses that promote the development and acquisition of energy resources by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming functions."
On the 4th and 18th of December 2012, JBIC additionally signed two loan agreements to support Japanese companies to participate in the above LNG project, see related measures.
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.