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The Japan Bank for International Cooperation (JBIC, Governor: HAYASHI Nobumitsu) signed on March 9 a loan agreement to set up a credit line totaling up to USD100 million, of which the JBIC portion is USD50 million, with CAF, Development Bank of Latin America and the Caribbean. The credit line is co-financed with Sumitomo Mitsui Banking Corporation (lead arranger), and the Joyo Bank, Ltd. JBIC will also provide a guarantee for the co-financed portion.
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This credit line is intended to finance, through CAF, the necessary funds for environment-related projects in the Latin American and Caribbean member nations of CAF, as part of GREEN operations.
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CAF, whose main shareholders are its 21 member countries mainly in the Latin American and Caribbean region, aims to achieve economic integration, as well as to promote economic development and trade finance in the region. CAF has also been focusing on initiatives in the sector of climate change and environment in the region. In this context, CAF is committed to allocating USD25 billion to green finance in five years from 2022 to 2026. JBIC has built a strong cooperative relationship with CAF over a period of more than forty years since 1975, through JBIC loans for infrastructure projects, as well as for exports of machinery and equipment to the Latin American and Caribbean region and for industrial investment and export promotion in the region. Based on the relationship between the two institutions, this loan will further support the efforts to achieve decarbonization of the region.
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In the Fourth Medium-term Business Plan, released in June 2021, JBIC aims to respond to energy transformation toward the realization of a decarbonized society. In addition, in its ESG Policy released in October 2021, JBIC is committed to pursuing ambitious and accelerated efforts to reduce its operational GHG emissions to net zero by 2030 and to achieve net zero emissions of its finance portfolio by 2050. The ESG Policy states that JBIC will contribute toward realizing global carbon neutrality by supporting and accelerating the energy transition toward a decarbonized society in emerging and developing countries. This loan is in line with the Medium-term Business Plan and ESG Policy of JBIC.
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As Japan's policy-based financial institution, JBIC will continue to support global environmental preservation efforts in cooperation with regional development banks by drawing on its various financial facilities and programs for structuring projects and performing its risk-assuming function.
