ANNOUNCEMENT 24 Jun 2014

On 24 June 2014, the Japan Bank for International Cooperation (JBIC) signed a loan agreement with PT. Rajamandala Electric Power in project financing.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

The Japan Bank for International Cooperation, press release of 25 June 2014, Project Financing for Rajamandala Hydro Power Plant Project in Indonesia: http://www.jbic.go.jp/en/information/press/press-2014/0625-22688
JBIC information on overseas investment loans: http://www.jbic.go.jp/en/finance/investment

Inception date: 24 Jun 2014 | Removal date: open ended

Financial assistance in foreign market

The loan agreement between JBIC and Indonesian PT. Rajamandala Electric Power has a maximum value of USD 66 million in project financing. Japanese The Kansai Electric Power Co., Inc. has invested in the Indonesian company.

The loan finances the construction and operation of the run-of-the river hydro power plant in Indonesia. The electricity produced will be sold to Indonesian PT. PLN (Persero) for a 30 year period.

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

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 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.

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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