1. Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) signed four memoranda of understanding (MOUs) with KazMunayGas (KMG) and the Development Bank of Kazakhstan (DBK) to promote bilateral trade and investment related to energy resource development in Kazakhstan. 
    
2. Their outlines are as follows (See appendix for details):

(1)   MOU on Comprehensive Strategic Partnership

• Signing Date: November 29
• Counterparty: KMG
• Outline: With regard to large-scale energy resource-related projects undertaken by KMG, cooperative arrangements will be formulated for a comprehensive utilization of JBIC's financing menu, including not only energy resource finance, but also export loans, overseas investment loans, untied loans, etc.  This is the first MOU JBIC will sign to build up a comprehensive strategic partnership with an oil and natural gas company in a CIS country.^*1

(2)   MOU on Establishing the Standby Multi-Guarantee Framework Facility (SMGF)

• Signing Date: November 29
• Counterparty: KMG
• Outline: SMGF determines in advance the form of guarantee letters to be issued by KMG, the parent company of the KMG group, when JBIC finances projects jointly undertaken by KMG group companies and Japanese firms.  It is the first arrangement where JBIC will prepare in advance the form of the guarantee letters to be issued by the parent company for project formulation.

(3)   MOU on an Untied Loan for Supporting Energy Resource-Related Infrastructure Development

• Signing Date: November 30
• Counterparty: DBK
• Outline: The objective of this MOU is to facilitate consultations between the two parties for early provision of an untied loan to DBK that will support energy resource-related infrastructure development.  This is expected to be the first untied loan JBIC will provide for a CIS country.

(4) MOU on a Global Bank-to-Bank Loan*2

• Singing Date: November 30
• Counterparty: DBK
• Outline: The objective of this MOU is to facilitate consultations between the two parties for early provision of a global bank-to-bank loan to DBK that will promote exports by Japanese firms to Kazakhstan.
  
  
  Large-scale oil fields are currently being developed in the Caspian Sea area that embraces Kazakhstan and Azerbaijan.  Among them are the Kashagan and Azeri-Chirag-Gunashli (ACG) oil fields, where Japanese oil developers have been participating in the development.  The BTC pipeline is also coming close to completion.^*3  Amid these developments, this area is attracting the attention of the Japanese oil industry as a new energy supply source outside the Middle East.  JBIC has supported these large-scale development projects by providing loans totaling US$2.7 billion to date.^*4  In particular, Kazakhstan ranks second to Russia among CIS countries in its endowment of crude oil, natural gas and other resources.  In recent years, the country has been drawing increasing attention from the international community for its natural resources, with neighboring countries acquiring interests in Kazak resources and pipelines for exporting crude oil to these countries being laid in one route after another.  The series of MOUs JBIC is to sign this time aim to strategically diversify Japan's energy supply sources by utilizing JBIC's wide range of financing schemes and providing multi-faceted and comprehensive support for energy resource development in the Caspian Sea region.
  
  
  
  JBIC has been cementing ties with KMG and DBK by signing cooperation agreements.^*5  Taking advantage of its status as an official financial institution, JBIC intends to further strengthen ties with government agencies and private firms in Kazakhstan, thereby helping diversify Japan's energy supply sources and supporting increased business opportunities for Japanese firms.
  
  
   

1. *1 CIS countries are comprised of 11 out of the 15 constituting republics of the former Soviet Union, with 3 Baltic countries and Turkmenistan excluded: Russia, Ukraine, Belarus, Moldova, Armenia, Azerbaijan, Georgia, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyz. 
2. *2 The eligible projects are not specified at the time of signing this loan.  Disbursements are made on a case-by-case basis, depending on the progress in transactions of exports from Japan.
3. *3 The pipeline transports crude oil produced by ACG and other oil fields in the Caspian Sea area from Baku (Azerbaijan) to Ceyhan, a Mediterranean city in Turkey, via Tbilisi (Georgia).  The pipeline stretches 1,750 km in total and has the capacity to ship 1 million barrels per day.
4. *4 Breakdown: ACG oil field (about$1,414 million); BTC pipeline (about$580 million); Kashagan oil field (about$649 million).
    
5. *5 Previous cooperation agreements
   - An agreement with DBK: signing: November 2003; objective: to expand trade between Japan and Kazakhstan and promote investment by Japanese firms in Kazakhstan.
   - An agreement with KMG: signing: February 2005; objective: to share information in order to promote Japan-Kazakhstan trade and investment regarding energy resource-related projects.
6.