Buyer's Credit for Government of Iraq
Supporting Export of Substation Facilities by Japanese Companies
- Area: The Middle East
- Export Loans
The Japan Bank for International Cooperation (JBIC; Governor: Akira Kondoh) signed on March 27 loan agreements on buyer's credit (export loan) totaling up to approximately JPY10.3 billion and USD193 million (JBIC portion), respectively, with the Government of the Republic of Iraq (Iraq). The loans are cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (lead arranger) and Sumitomo Mitsui Banking Corporation, bringing the total cofinancing amount to approximately JPY17.3 billion and USD322 million. Nippon Export and Investment Insurance (NEXI) provides insurance for the portion cofinanced by these two Japanese commercial banks.
These loans are intended to finance the purchase of a set of substation facilities from Toyota Tsusho Corporation by the Ministry of Electricity of Iraq in order to carry out construction of the substations in 16 domestic sites. TOSHIBA CORPORATION will manufacture 400/132kV substation equipment for 4 sites, while MEIDENSHA CORPORATION manufactures 132/33kV mobile substation equipment for 12 sites. Toyota Tsusho Corporation assumes engineering, procurement and construction of the equipment.
The Iraqi power sector currently remains at approximately 12GW of supply capacity, whereas a capacity of around 16GW to 18GW is in need. In order to increase the capacity and meet the demand, the government of Iraq is planning to improve and develop facilities for power generation, transmission, and transformation. Under such circumstances, these loans will help promote Iraq's independent reconstruction through enhancement and stabilization of power supply by introducing high-quality infrastructure, and at the same time contribute to maintaining and strengthening the international competitiveness of Japanese industries. Furthermore, the project's initiatives have been developed under an agreement between Japanese and Iraqi governments, and thus it is expected to build stronger relationship between the two countries.
As Japan's policy-based financial institution, JBIC will continue to support Japanese companies' export of infrastructure facilities, as well as their overseas business deployment, by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.