ANNOUNCEMENT 27 Feb 2017
On 24 February 2017, the Japan Bank for International Cooperation (JBIC) signed an overseas investment loan agreement with Indonesian company PT. Bhumi Jati Power in project financing.
NUMBER OF INTERVENTIONS
The Japan Bank for International Cooperation, press release of 27 March 2017, Project Finance for Re-expansion of Tanjung Jati B Coal-Fired Power Plant in Indonesia: http://www.jbic.go.jp/en/information/press/press-2016/0227-53954
JBIC information on overseas investment loans: http://www.jbic.go.jp/en/finance/investment
The overseas investment loan agreement in project financing between JBIC and Indonesian company PT. Bhumi Jati Power (BJP) has a maximum value of USD 1.678 billion. The Japanese companies SUMITOMO CORPORATION and The Kansai Electric Power Company, Incorporated among others have stakes in the Indonesian company.
The loan supports the Indonesian company's project to re-expansion the Tanjung Jati B coal-fired power plant. The power generated at this plant will be sold to the Indonesian state-owned power utility company PT PLN (Persero).
In this context, JBIC stated: "JBIC will continue to financially support the expansion of the overseas infrastructure business of Japanese companies by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function."
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.