ANNOUNCEMENT 11 Apr 2017

On 31 March 2017, the Japan Bank for International Cooperation (JBIC) signed buyer's credit loan agreements with Vietnam Electricity to finance the purchase of a whole set of machinery and equipment including steam turbines from Japanese manufacturers and exporters.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The Japan Bank for International Cooperation, press release of 11 April 2017, Buyer's Credit for Vietnam Electricity (EVN): http://www.jbic.go.jp/en/information/press/press-2017/0411-55033

Inception date: 31 Mar 2017 | Removal date: open ended

Trade finance

The buyer’s credit loan agreements between JBIC and Vietnam Electricity has a maximum value of USD 50 million. Additionally, the private Japanese bank The Bank of Tokyo-Mitsubishi UFJ, Ltd will co-finance the loan with approximately USD 84 million, which the governmental agency Nippon Export and Investment Insurance will provide an insurance for.

The loan finances the company's purchase of a whole set of machinery and equipment including steam turbines manufactured by the Japanese company TOSHIBA CORPORATION and exported by a consortium consisting of Japanese Mitsubishi Corporation and other companies. The import these Japanese goods will enable the company to build a ultra-supercritical coal-fired power generation plant.

In this context, the JBIC stated: "JBIC will continue to support Japanese companies' overseas infrastructure business deployment, by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function."

Notably, a similar buyer's credit agreement was signed with Vietnam Electricity in July 2014, see related state act.

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.

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