ANNOUNCEMENT 16 Jul 2020

July 16th, 2020 - The Japan Bank for International Cooperation announced it had signed a loan deal to fund trade to Japan.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Japan Bank for International Cooperation, July 16th, 2020. (Project Financing for Mozambique LNG Project (Rovuma Offshore Area 1 Block))
https://www.jbic.go.jp/en/information/press/press-2020/0716-013514.html

JBIC information on overseas investment loans: https://www.jbic.go.jp/en/support-menu/investment.html

Confirmation from Japan Oil, Gas and Metals National Corporation (JOGMEC), July 16th, 2020. (三井物産株式会社のモザンビーク共和国における天然ガスの開発・液化事業の債務保証(完工保証)採択について)
http://www.jogmec.go.jp/news/release/news_15_000001_00047.html

Inception date: 15 Jul 2020 | Removal date: open ended

Financial assistance in foreign market

On July 15th, 2020, the Japan Bank for International Cooperation (JBIC) signed a loan agreement worth USD 3bn (of a total of USD 14.4bn) to fund the development of facilities in the Mozabique Offshore Area 1 natural gas field.

The project is a joint venture between several organisations, including the Japan Oil, Gas and Metals National Corporation (JOGMEC). The agreement was signed with the provision that 30% of the produced natural gas would be taken by Japanese utility companies, because the '[...] Japanese government recognized[sic] that one of its most crucial policy agendas is to secure the stable supply of natural gas to Japan', according to the JBIC's press release concerning the signing.

JBIC stated that the funding was intended to go toward the development of the gas field itself and production of LNG derived from it.

The loan is one of the JBIC's overseas investment loans, explained in detail below:

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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