During the Fourth Tokyo International Conference on African Development (TICAD IV) on May 28-30, 2008, organized jointly by the Government of Japan, the United Nations and the World Bank, Prime Minister Fukuda unveiled many initiatives for supporting African development. As part of such initiatives, he touched on the utilization of international financial operations (IFOs) of JBIC to double Japanese private investment in Africa over the next five years. The following are specific financing program/schemes in IFOs to support African development:
(1)The JBIC Facility for African Investment(FAI) 1 will be created in April, 2009, in the new JBIC (operating as the international finance sector of Japan Finance Corporation (JFC) to be established in October, 2008) with a view to supporting the business development of Japanese firms in Africa. The Facility allows the new JBIC to actively engage in equity investments, guarantees for the loans of private banks and local currency financing to projects in African countries. Specific plans being worked out by JBIC under FAI include: equity investment to The Currency Exchange Fund, N.V. (TCX) 2; and a local currency financing scheme by utilizing TCX. JBIC will also expand its advisory services, including the preparation of Blue Books on Best Practices in Investment Promotion and Facilitation3 , and consider a new scheme for promoting trade with African countries.
(2)JBIC will support projects in such areas as manufacturing, energy and natural resource development, and infrastructure development in Africa's power and port sectors by utilizing equity investment, guarantees and local currency loans under FAI, in addition to its hard-currency direct lending and other IFO financing instruments. The total financial support for Africa in IFOs will amount to US$2.5 billion over the next five years.
Governor Koji Tanami having a meeting
with the president of Namibia, H. E. Mr. Pohamba
Governor Koji Tanami exchanging the signed copies of MOU
with DBN CEO D. Nuyoma
On the sideline of the TICAD IV, JBIC signed a memorandum of understanding (MOU) with the International Finance Corporation (IFC) of the World Bank Group for cooperation in financing and mobilizing private sector investments in Africa. Based on this MOU, JBIC and IFC will share information and views, and undertake cooperation for promoting business activities of Japanese companies which have a keen interest in business opportunities in such areas as natural resource development and private participation infrastructure projects. JBIC has also signed an MOU with the Development Bank of Namibia (DBN), an official financial institution of the Republic of Namibia, for sharing information and building cooperative ties to support Japanese business operations in Namibia.
Senior Executive Director Fumio Hoshi shaking hands
with IFC Vice President J. Koskelo
JBIC will actively encourage Japanese trade and investment activities in Africa by making maximum use of FAI as well as its other financial menu, while further enhancing partnerships with relevant institutions, and thereby help to accelerate and consolidate private sector-led growth in African countries.
(Appendix 1) Schematic illustration of the Facility for African Investment (FAI)
(Appendix 2) Press release on the signing of MOU with IFC
(Appendix 3) Press release on the signing of MOU with DBN
- *1 A facility is not a fund or account, but a program with specific procedures for managing operations.
- *2 A fund set up on the initiative of the Netherlands Development Finance Company. TCX serves as a currency/interest swap counterparty to enable the local currency funding of its investors. The investors or their designated financial institutions will be entitled to swap up to four times the amount of investment.
- *3 To date, JBIC has prepared the Blue Books for five African countries: Kenya, Uganda, Tanzania, Ghana and Zambia.