Individual Agreement Based on Export Credit Line for Mongolia
Supporting Exports of Mining Equipment by Japanese Companies to Mongolia
- Area: Asia
- Machinery and Equipment
- Export Loans
The Japan Bank for International Cooperation (JBIC; Governor, CEO: Hiroshi Watanabe) signed a loan agreement on June 11 in the amount of up to about JPY200 million (JBIC portion) based on a credit line*1
extended to the government of Mongolia in June 2013. The loan is cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (lead arranger), bringing the overall cofinancing amount to JPY400 million. The part of cofinanced portion is insured by Nippon Export and Investment Insurance (NEXI).
The loan is intended to provide, through the Ministry of Finance of Mongolia, the necessary funds for Khishig Arvin Industrial LLC, a Mongolian company, to purchase from SUMITOMO CORPORATION mining machinery made by Komatsu Ltd. and related services.
The governments of Japan and Mongolia signing the "Agreement between Japan and Mongolia for an Economic Partnership" this February, is expected to further vitalize the two countries' economies in a wide range of fields, along with the facilitation of trade and investment between the two countries. In addition, in March 2013, the "ERCH Initiative*2
" was proposed by Prime Minster Abe in expectation of promoting the economic relationship between the two countries, and in July 2014, "ERCH Initiative Plus*3"
was agreed by the two countries' leaders, supplementing the original and declaring to promote the financing that utilizes this credit line. This loan is in line with such measures of the two countries, and thereby, the loan will contribute to maintaining and strengthening the international competitiveness of Japanese industries, as well as supporting the development of the Mongolian economy, through the export of mining machinery.
As Japan's policy-based financial institution, JBIC will continue to support the export of machinery and equipment and the overseas business deployment of Japanese companies, in foreign countries including Mongolia, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
- *1 See Press Release on June 6, 2013.
- *2 The proposal by Prime Minister Abe upon his visit to Mongolia in March 2013, for achieving vibrant economies in the two countries, with two pillars of (1) development of investment environment and (2) cooperation for sustainable economic development.
- *3 The proposal by Prime Minister Abe upon President Elbegdorj's visit to Japan in July 2014, for promoting Mongolia's exports and industrial diversification.