ANNOUNCEMENT 05 Jun 2013
On 5 June 2013, the Japan Bank for International Cooperation (JBIC) signed an overseas investment loan agreement with Nghi Son Refinery and Petrochemical Limited Liability Company in project financing. The governmental agency Nippon Export and Investment Insurance (NEXI) will additionally provide a guarantee or insurance for the loans provided by a number of private Japanese banks.
NUMBER OF INTERVENTIONS
The Japan Bank for International Cooperation, press release of 5 June 2013, Project Financing for Nghi Son Oil Refinery and Petrochemical Complex Project in Vietnam: http://www.jbic.go.jp/en/information/press/press-2013/0605-7526
Nippon Export and Import Insurance, press release of 6 June 2013, Vietnam / Nghi Son Oil Refinery and Petrochemicals Complex Project（Overseas Untied Loan Insurance and Overseas Investment Insurance: http://www.nexi.go.jp/en/topics/newsrelease/004804.html
JBIC information on overseas investment loans: http://www.jbic.go.jp/en/finance/investment
NEXI information on Types of Insurance: http://www.nexi.go.jp/en/products/types/index.html
The overseas investment loan agreement in project financing between JBIC and the Vietnamese company Petrochemical Limited Liability Company has a maximum value of USD 1.65 billion. The Vietnamese company is established by the Japanese companies Idemitsu Kosan Co., Ltd. and Mitsui Chemicals, Inc. alongside the foreign companies Kuwait Petroleum Europe B.V.2 and Vietnam Oil and Gas Group (PVN). Besides the overseas investment loan agreement issues by JBIC, the governmental agency Nippon Export and Investment Insurance (NEXI) issued a USD 5 billion loan guarantee or insurance for a portion of the USD 5 billion co-financing amount approved by a number of private financial institutions. According to NEXI the amount covers USD 1.3 billion and issued as an Overseas Untied Loan Insurance.
The loan and guarantee finances a project to construct and operate an oil refinery and petrochemical complex in Viet Nam to hereafter produce various petroleum products including gasoline, paraxylene and polypropylene.
In this context, the Bank stated: "JBIC will continue to support the overseas infrastructure business activities of Japanese companies, as a public official financial institution, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function, and contribute to maintaining and improving the international competitiveness of Japanese industries".
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.
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.
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.