Operational Results for First Quarter of FY2010
July 28, 2010
The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1 today released operational results for the first quarter (April-June) of fiscal 2010. A summary of the results is given below. See Appendix for a detailed breakdown of the figures by financial instrument.
In the first quarter of FY2010, JBIC made 17 overall commitments totaling 98.4 billion yen in loans, equity participation and guarantees.
(2) Disbursements, Repayments and Outstanding Amounts
Disbursements amounted to 261.5 billion yen, while repayments were 338.3 billion yen in the first quarter of 2010. As a result, outstanding loans and equity participation totaled 8,531.2 billion yen and outstanding guarantees were 1,919.7 billion yen, with the total amount outstanding reaching 10,450.9 billion yen at the end of the first quarter.
II. Operational Highlights
1.Launching Global Environmental Preservation Operations (GREEN Operations)
Following the revision of the Japan Finance Corporation Act in March 2010, JBIC launched global environment preservation operations (called GREEN*2 operations) for promoting overseas projects aimed at preserving the global environment, especially those preventing global warming.
During the first quarter, JBIC Guidelines for Measurement, Reporting and Verification GHG Emissions in JBIC's GREEN Operations (J-MRV) were established. J-MRV sets out the basic concepts and procedures for the measurement, reporting and verification of greenhouse gas (GHG) emission reductions generated by the projects financed by GREEN operations. JBIC also laid the groundwork for conducting GREEN operations by signing a memorandum of understanding (MOU) with the Asian Development Bank for cooperation in the formulation of projects preserving the global environment.
2. Supporting Japanese Industries' Efforts to Maintain and Improve International Competitiveness
Commitments totaling 26.6 billion yen were made in loans and equity participation to help Japanese firms win orders for overseas infrastructure projects as well as to support those exporting machinery and equipment or developing their business abroad. Major operations included: a project finance loan to a refinery construction project in Saudi Arabia for which Japanese firms won orders; an export loan to finance ship (bulk carrier) exports to Turkey; and equity participation in a fund jointly managed by Japanese firms for growth companies in Vietnam.
JBIC also strengthened cooperation with developing country governments and state-owned enterprises which promote industrial diversification and infrastructure development, in order to increase Japanese plant exports and opportunities to participate in projects in those countries, such as signing an MOU with the Egyptian government on a comprehensive strategic partnership and an MOU with PETROVIETNAM on operational cooperation.
3. Supporting Overseas Development of and Acquisition of Interests in Strategically Important Overseas Resources
Loan commitments totaling 68.9 billion yen were made to support projects that will contribute to the stable supply of energy and other resources to Japan, including a loan for the redevelopment of a copper mine in Canada.
4. Response to the Global Financial Crisis
In response to the global financial crisis, the Japanese government empowered JBIC to conduct emergency overseas business support operations*3 at the end of December 2008 as an exceptional measure to maintain the international competitiveness of Japanese industries. By the end of June 2010, cumulative loans and guarantees amounted to 2,062.3 billion yen. (Loan commitments in the first quarter amounted to 2.9 billion yen.)
The Guarantee and Acquisition toward Tokyo market Enhancement (GATE), a new facility for supporting samurai bond*4 issuance, was launched in April 2010, replacing and enhancing the Market Access Support Facility (MASF) instituted in May 2009. Under the GATE facility, JBIC may acquire a portion of a samurai bond issue, as necessary, in addition to providing a partial guarantee. Expectations are that this will provide the underpinnings necessary for foreign governments and government agencies to issue samurai bonds in the Tokyo bond market, ushering in more overseas issuers and allowing them to become regular issuers, while increasing investment opportunities for domestic investors. These developments will boost activities in the Tokyo samurai bond market.
Following the promulgation and enforcement of the Cabinet Order for Amendment of Part of the Enforcement Order of the Japan Finance Corporation Act in April, JBIC is now empowered to provide financial support for high-speed intercity railway projects in industrialized countries under its overseas investment finance facility (providing loans and guarantees).
- *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
- *2 GREEN is the acronym for Global action for Reconciling Economic growth and Environmental preservation. The GREEN initiative reflected prevailing expectations on “achieving both environmental and economic sustainability” through financing operations.
- *3 The operations consist of: (1) supplier's credit (for Japanese exporters) to finance exports to developing countries; (2) loans for developing country projects/operations through major domestic firms; and (3) loans and guarantees for Japanese business operations in industrial countries. These operations are temporary measures and will be terminated at the end of March 2011.
- *4 Samurai bonds are yen-denominated bonds issued in the Japanese financial market by a foreign government or company.