On 27 March 2013, the Japan Bank for International Cooperation (JBIC) signed an overseas investment loan agreement with Empresa Electrica Cochrane SpA in project financing.



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The Japan Bank for International Cooperation, press release of 28 March 2013, Project Financing for Cochrane Coal-Fired Power Project in Chile:
JBIC information on overseas investment loans:

Inception date: 27 Mar 2013 | Removal date: open ended
Still in force

Financial assistance in foreign market

The overseas investment loan agreement in project financing between JBIC and Empresa Electrica Cochrane SpA has a maximum value of USD 500 million. The company is a Chilian subsidiary of the Japanese company Mitsubishi Corporation. Additionally, a number of financial institutions will co-finance the project with an additional USD 500 million, which will be insured by the Japanese governmental institution Nippon Export and Investment Insurance (NEXI) and Korean governmental institution Korea Trade Insurance Corporation (K-sure).

The loan supports the Chilian subsidiary's Cochrane Coal-Fired Power Project. In this project, Empresa Electrica Cochrane SpA will build and operate a  coal-fired power plant in Chile. The electricity generated from the plant will be sold to the Sierra Gorda Copper Mine as well as domestic mining companies.

In this context, JBIC stated: "JBIC will continue to support the overseas infrastructure business activities of Japanese companies by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming functions, and contribute to maintaining and improving the international competitiveness of Japanese industries."

Project finance
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.