Report on FY2016 Operations

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May 30, 2017

The Japan Bank for International Cooperation (JBIC; Governor: Akira Kondoh) today reported its operational results for FY2016.
A summary of the results is given below. See the Appendix for a detailed breakdown including the figures by regions and financial instruments and for trends of the past five years.

I. Overview

 ■ In FY2016, JBIC made overall commitments totaling JPY2.2397 trillion in loans, equity participations and guarantees, a decrease of 6.5% from the previous year.
 ■ Outstanding loans and equity participations amounted to JPY14.6574 trillion, while outstanding guarantees were JPY2.385 trillion as of March 31, 2017. This brought the overall outstanding amount to JPY17.0424 trillion.

II. Operational Highlights

1. Efforts to Promote Overseas Development and Acquisition of Important Resources for Japan

   Securing stable medium to long-term supplies of energy and mineral resources through increasing the self-development ratio is a vital task in Japan, as a country heavily dependent on imports from overseas for most of its resources. Through financially supporting acquisition of upstream resource interests, diversification of supply sources, enhancement of fuel value chain, and strengthening of relationships with resource-rich countries, JBIC contributes to securing a stable long-term supply of resources. In FY2016, JBIC made a total of 4 commitments amounting to JPY250.5 billion in loans, equity participations and guarantees for projects and transactions in the resource sector as a whole.
   As examples, JBIC provided necessary funds to the Tangguh LNG 3 project in Indonesia for additional development and production of gas fields, as well as expansion of existing gas liquefaction facilities. JBIC also financed the New Oilfield (Hail) development project in Abu Dhabi, and provided funds required for acquisition of interest in Morenci Copper Mine in the U.S.
 

2. Efforts to Maintain and Strengthen the International Competitiveness of Japanese Industries

   Amid the increasing trend in Japanese industrial circles of seeking business opportunities outside of Japan given the declining domestic demand, JBIC supports Japanese companies to maintain and expand their overseas market acquisition strategies and supply chains by drawing on its various financial facilities and schemes. In such a way, JBIC contributes to maintaining and strengthening the international competitiveness of Japanese industries. In these areas, JBIC made a total of 249 commitments amounting to JPY1.9728 trillion in loans, equity participations, and guarantees in FY2016.

(1) Supporting Overseas Infrastructure Business Deployment by Japanese Companies
   In the power sector, JBIC provided loans for Muara Laboh geothermal power project in Indonesia and for a waste treatment and power generation project in the U.S., both of which are invested in by Japanese companies. JBIC also supported Japanese companies to export gas-fired combined cycle power plant facilities to PT PLN (Persero), a state-owned power company in Indonesia.

(2) Supporting Strategic Overseas Business Activities of Japanese Companies
 (a) Supporting Overseas Investments by Japanese Companies
   JBIC provided loans for the car sales financing business in Thailand run by a Japanese company, and for a steel processing and distribution business in India participated in by a Japanese company.
   Furthermore, JBIC contributed to a private equity fund that invests in companies in Mexico, Canada, and the U.S., as well as to a fund which provides loans and equity to microfinance organizations in ASEAN countries. JBIC also acquired preferred shares for a Japanese companies' industrial park operation business in India.
 (b) Supporting Export by Japanese Companies
   JBIC used project financing*1 to provide necessary funds for exporting Japanese-made plant facilities to Yamal LNG project in Russia. JBIC also supported the export of vessels built by Japanese shipbuilding companies.

(3) Supporting Overseas Business Deployment of Mid-tier Enterprises and Small and Medium-Sized Enterprises
   To support the overseas business expansion of Japanese mid-tier enterprises and small and medium-sized enterprises (SME), JBIC made a total of 114 commitments, in cofinance with regional financial institutions and Shinkin banks in Japan. The support included loans for a solar power generation project in Mongolia and the automotive parts manufacturing and sales businesses in Indonesia run by Japanese companies.
   Furthermore, a total of 67 Japanese financial institutions joined the framework, established based on MOUs which JBIC signed with Mexican state governments and Mexican financial institutions to support Japanese mid-tier enterprises and SMEs, who are clients of Japanese regional financial institutions, expand their businesses to Mexico.
   In addition, JBIC established credit lines with Japanese regional financial institutions, as well as overseas subsidiaries of Japanese leasing companies, to support the overseas business deployment of mid-tier enterprises and SMEs.

(4) Other Support
   JBIC provided 18 local currency loans*2 totaling the equivalent of approximately JPY16.7 billion. They included JBIC's first Russian ruble loan to fund a car sales financing business in Russia by a Japanese company; and a Thai baht loan to fund an automobile exhaust-purifying ceramic product manufacturing and sales business in Thailand.
   JBIC also signed a guarantee agreement with private financial institutions for loans necessary for the import of aircrafts.

3. Efforts in the Environment-related Sector

   JBIC established credit lines for renewable energy and energy efficiency businesses with the Government of Ecuador and a Philippine financial institution under GREEN operations.
 

4. Supporting Samurai Bond Issuance

   JBIC agreed to provide a guarantee for the Samurai bonds (privately placed Japanese yen-denominated foreign bonds) issued by a Mexican state-owned petroleum company, and to acquire a part of the bonds issued by the Government of Indonesia.
 

5. Promoting the Liquidation of Loans

   JBIC made partial liquidation of project financing owned by JBIC for a power infrastructure projects through a trust account, in order to promote active utilization of Japanese private financial institutions.
 

6. Launch of the Special Operations

   The Act for Partial Amendment of the Japan Bank for International Cooperation Act was enacted on May 11, 2016, enhancing JBIC's functions in order to provide further support toward Japanese companies' overseas businesses, in accordance with the Japanese Government's policy to promote investment in quality infrastructure, such as the "Partnership for Quality Infrastructure." In October 2016, as part of the enhancement of functions, JBIC launched the Special Operations, which enables financing for a wider range of countries and infrastructure projects. JBIC supported the export of substation facilities to the Iraqi government as the first loan provided under the Operations.



[Appendix]
1. Loans, Equity Participations, and Guarantees
2. Commitments by Region and Purpose of Financing
3. JBIC's Operations (Last 5 Years)

Note
  1. *1 Project finance is a financing scheme in which repayments for a loan are made solely from the cash flows generated by the project.
  2. *2 Currencies other than JPY, USD and EUR
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