Overseas Investment Loans
JBIC provides overseas investment loans to meet long-term financing needs of Japanese firms for their international business development, including projects that will establish/expand production bases and develop natural resources overseas. By supporting effective implementation and operation of these projects, JBIC seeks to bolster their efforts to uphold international competitiveness; develop overseas markets; and ensure access to stable supplies of resources crucial to domestic economic activity; thereby making a positive impact on the Japanese economy.
- With JBIC assuming specific risks, businesses can reduce political risk, including the risk associated with currency convertibility and transfer, which characteristically involves overseas business operations. JBIC helps as much as possible the business firms undertaking overseas projects, when they come to face difficulties in their relations with the local governments and authorities and due to inadequate supporting infrastructure.
- For small and medium enterprises, preferential terms are applicable.
Direct and indirect financing is provided for the projects undertaken by the firms incorporated in developing countries and regions in which Japanese firms have equity shares. The projects contributing to the overseas development and acquisition of resources that are strategically important for Japan and the projects in specially designated areas are also eligible in developed countries for overseas investment finance. Examples are:
- Direct Loans to Foreign Entities
- Loans to Domestic Firms for the Projects Contributing to Securing Access to Stable Supplies of Resources to Japan (including Acquisition of Interests)
JBIC provides loans in cofinancing with other financial institutions (usually the loan applicant's bank(s)) to meet the client's financial needs.
Loan terms and conditions are determined following the loan appraisal with respect to individual projects, while taking account of the following points.
Loan Amount, Currencies and Interest Rates
- The loan amount, which should not exceed the value of a contract associated with overseas investment, is applied to meet financial needs for undertaking a specific overseas investment project or long-term needs for investment to develop overseas business operations. Loans are disbursed when actual financing needs arise.
- Loans finance, in principle, up to a specified percentage of financial needs and are provided in cofinancing with private financial institutions with a view to complementing their financing.
- Loans may be provided in currencies other than the Japanese yen (in principle, in the US dollar or euro).
- Loans denominated in the yen carry fixed interest rates, while loans in other currencies carry, in principle, floating interest rates. A loan applicant should make an inquiry at the relevant loan department for specific loan conditions.
Repayment Period and Method
The repayment period is determined by taking account of the period required for recouping investment. Since no limit is set on the repayment period, repayment schedule can be set flexibly, including the grace period, depending on the expected rate of return on individual projects. In general, repayment periods range between one and ten years.
The sum of principal and interest has to be repaid by installments.
Security and Guarantee
JBIC makes its own judgment on security or guarantee after consulting with the client.