Part of Minas Gerais Steel Works (image)

One area being developed under the project to improve and refurbish iron ore transportation infrastructure for Companhia Vale do Rio Doce (image).

In March 2006, JBIC signed a loan agreement with Brazil's Companhia Vale do Rio Doce, the world's largest iron ore supplier, to improve and refurbish its transportation infrastructure. Of all iron ore imported into Japan, about 20% comes from this one company. The project will contribute to the expansion of the company's iron ore supply capacity by refurbishing the rail and port facilities it uses to transport the ore.

Then in January 2006, JBIC signed an agreement with a Japanese bank for joint financing up to US$100 million for the capital investment costs of Minas Gerais Steel Works S.A. (Usiminas). Since its establishment in 1958 as part of the first collaborative Japan-Brazil business project, Usiminas has pursued manufacturing projects in cooperation with Japan's iron and steel industry. The loan supports the expansion of electric generating facilities owned by the company, to ensure its stable supply of power.

In support of another Japan-Brazil national project, in February 2007 JBIC agreed to cofinance with a Japanese bank a loan up to US$340 million for the expansion project of alumina refinery by Alumina Do Norte Do Brasil S.A., an aluminum smelting company established in 1978.

JBIC will continue to provide financial support for resource-related projects involving the participation of Japanese corporations in Brazil, including the above national projects, to contribute to Japan's efforts to secure a stable supply of natural resources.

Ceremony marking the signing of the JBIC-Petrobras Memorandum of Understanding

Brazil is the world's second largest producer of bioethanol after the United States (U.S. 2006 production: 19 billion liters; Brazilian production, same year: 17 billion liters). The two countries account for about 70% of global bioethanol production. Brazil is by far the most important exporter (3.4 billion liters in 2006), and has ample land resources for ethanol production. Using sugar cane, Brazil's ethanol production costs are among the lowest in the world. Brazil is considered to be the only country with the potential to greatly expand production and exports.

In March 2007, JBIC signed a Memorandum of Understanding with Petrobras, Brazil's state owned oil company, to assess the possibility of financing biofuel projects. The MOU envisages comprehensive cooperation aimed at exporting biofuels to Japan, with Petrobras and Japanese companies forming a partnership to promote biofuel production and marketing projects in Brazil and third countries. JBIC is considering offering financial support for these projects.

JBIC intends to develop even stronger ties with oil and other energy-related companies in countries rich in natural resources, to help diversify Japan's sources of energy and ensure energy security in Japan.

FPSO, photo credit: INPEX

In March 2007, JBIC signed an agreement with INPEX Offshore North Campos, Ltd.(IONC) for a loan totaling up to approximately US$170 million. INPEX Corporation (an international developer of petroleum and natural gas resources) and Sojitz Corporation are among the Japanese companies holding equity stakes in IONC. The loan is cofinanced with several Japanese banks.

The loan will be used to finance part of the development of the Frade Block oil field located off the Campos shore. The development is being pursued by Chevron Corporation of the United States (the major partner), Petrobras (a Brazilian state-owned oil company), and IONC. The Frade Block is an oil field located 1,050 to 1,300 meters water depth.

Oil extraction at a deep sea oil field off the Brazilian coast (image)

IONC began participating in the oil field development project after it obtained concession rights in 1999. This is the first Brazilian oil development project in which a Japanese company has such rights.

Crude oil extraction is scheduled to begin in 2009, with production peaking at 100,000 barrels per day. IONC plans to import into Japan the volume of crude oil proportionate to its approximately 18.3% interest share, through swaps.

The deep-sea extraction technology used in the Frade Block is among the most advanced in the world, and is attracting attention for its potential to be used to develop not only other Brazilian oil fields but also deep-sea fields off Africa and elsewhere.

CDM seminar held in Brasilia

JBIC organizes a variety of seminars to promote CDM business potential. The seminars it organized in Brasilia in August 2007 and in Rio de Janeiro the following month followed a workshop format. Their main aim was to examine CDM projects from a government and government institution perspective.

JBIC will continue to organize such seminars as part of its support for CDM project formation, as yet another way to contribute to Japan's efforts to meet its Kyoto Protocol emission reduction commitments.