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About JBIC
About JBIC

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JBIC offers a range of financial products and other services to our clients.

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Energy and Natural Resources Finance Group

Photo of AMANO Tatsushi, Managing Executive Officer, Global Head of Energy and Natural Resources Finance Group

The years 2022 and 2023 will be memorized as a turning point in the history. Russian invasion of Ukraine made us realize a harsh reality that resources are vulnerable to geopolitical issues. In addition, the hottest summer in 120,000 years showed us the threat of climate change.

Amid these turbulent times, countries including Japan have changed their policies to enhance the resilience of resource and energy sectors and promote decarbonization. However, no policy can turn the world upside down overnight, and there are uncertainties about the future. Also, if we only thought of our own benefits, the rift with the global south countries would be even wider.

The Analects of Confucius says: “A wise man looks after the fundamentals. When the fundamentals are firmly established, a moral way will grow.” It is important to return to the fundamentals when an environment drastically changes. The fundamentals of our group are the long trustful relationship with customers. In July 2022, the Oil and Gas Finance Department was renamed as the Energy Solutions Finance Department and the Energy Transformation Strategy Office was established. This represents our intention to commit ourselves to customers.

The Energy and Natural Resources Finance Group will value the roots and further focus on solving social issues of emerging countries in Africa and other areas by providing support to secure stable resources and energy supplies, promote decarbonization, and enhance supply chain resilience going forward. Also, we aim to provide long-term funding to supplement private-sector funds and further enhance risk taking ability.

AMANO Tatsushi
Managing Executive Officer
Global Head of Energy and Natural Resources Finance Group

Business Environment and Key Challenges

The 1.5℃ target was agreed on after the Paris Agreement and the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26), and countries around the world are pushing forward climate change initiatives. However, in order to curb global warming, further acceleration of such initiatives is required. In its Strategic Energy Plan, the Government of Japan aims to utilize renewables, such as wind, solar and biomass, as major sources of power and to achieve decarbonization through power generation using hydrogen and ammonia and innovative thermal power generation with CO2 emission reduction measures, such as CCUS and carbon recycling. At the same time, amid the rising energy price since the Russian invasion of Ukraine, the importance of energy security has been increasing. At the G7 Ministers’ Meeting on Climate, Energy and Environment in Sapporo in May 2023, it was agreed to address not only climate change but energy security in an integrated manner. In addition to securing stable energy supply, diversifying suppliers has become a significant challenge. As the world’s energy situation is undergoing a significant shift, Japan, a large importer of natural resources, is required to achieve both energy security and energy transition.

In these global circumstances and market conditions, the roles that JBIC is required to play diversity to encompass, amongst other things, proposing energy solutions to secure strategically important resources and address climate change in a balanced manner, helping the development of zero emission energy from hydrogen and fuel ammonia, and supporting the security of the strategic resources, such as semiconductors and battery minerals, while strengthening the resilience of the entire supply chain. To address these issues, flexible and proactive financial support of JBIC is essential.

JBIC’s Activities

JBIC is endeavoring to identify and form new projects and cultivate relations with government-related organizations and entities of each country. By supporting stable supplies of strategically important resources, JBIC aims to secure next-generation energy and establish a value chain toward the realization of a decarbonized society and address global issues including social ones. Below are the major achievements of the Energy and Natural Resources Finance Group in FY2022.

Initiatives for securing stable supply of strategically important resources and maintaining and improving the international competitiveness

Loan to JERA to Support LNG Imports

Supporting Japanese Energy Company for Stable Procurement of LNG

JBIC concluded a loan agreement with JERA Co., Inc. (JERA). The loan is to finance JERA’s importing of liquefied natural gas (LNG).

As resource prices rise and a stable supply of electricity is recognized as an urgent issue for the lives of the Japanese people and national economic activities, it has become more important than ever to ensure stable procurement of LNG to be used as fuel for gas-fired power generation. Financing JERA with this loan is intended to support a stable supply of electricity by securing a stable supply of energy to Japan.

Loan for Building Pellet Feed Plant of CSN Mineração S.A. of Brazil

Contributing toward Long-term Securing of Mineral Resource by Japanese Company
Photo of Construction site for a pellet feed plant in BrazilConstruction site for a pellet feed plant in Brazil

JBIC concluded a loan agreement with CSN Mineração S.A. (CM) of Brazil. The loan is intended to finance the funds necessary for CM, of which ITOCHU Corporation (Itochu), JFE Steel Corporation, and Kobe Steel, Ltd. are shareholders among others, to build a new pellet feed production plant. Pellet feed is processed iron ore crushed into particles. It is an essential raw material for low-carbon steelmaking and plays a vital role in reducing CO2 emissions in the process. Itochu will secure its long-term offtake right of the pellet feed produced by the plant.

The loan will financially support Itochu’s long-term securing of pellet feed, thereby contributing toward a stable supply of the critical mineral resource for the Japanese steel industry and toward supply chain resilience and the realization of a sustainable society.

Loan for Joint Steelmaking Business between Nippon Steel Corporation and ArcelorMittal S.A. of Luxembourg through ArcelorMittal Nippon Steel India Limited of India

Supporting Steel Business of Japanese Company in India
Photo of Expansion of Hazira Steel Mill of AM/NS IndiaExpansion of Hazira Steel Mill of AM/NS India

JBIC concluded a loan agreement with AMNS Luxembourg Holding S.A. (AMLH) of Luxembourg, a joint venture between Nippon Steel Corporation (Nippon Steel) and ArcelorMittal S.A. (AM) of Luxembourg. The loan is intended to finance part of the funds necessary for Nippon Steel to make capital investment in an integrated steel mill in western India belonging to ArcelorMittal Nippon Steel India Limited (AM/NS India), an Indian subsidiary of AMLH, as part of their joint steelmaking business through AM/NS India.

The loan will capture growing steel demand in the mid to long term in the steel market of India, which is expected to make steady growth and support Nippon Steel’s overseas business expansion, thereby contributing toward maintaining and improving the international competitiveness of Japanese industry.

Initiatives for Energy Transition

JBIC Concludes MOUs on Strategic Cooperation with YARA International ASA of Norway and Sembcorp Industries Ltd. of Singapore

Strengthening Cooperation in Sector of Hydrogen and Ammonia as Fuel Source

JBIC concluded a memorandum of understanding (MOU) on strategic cooperation with YARA International ASA (YARA), a Norwegian company to promote cooperation in the sector of using ammonia as a fuel source, and one with Sembcorp Industries Ltd. (Sembcorp), a Singaporean company to promote cooperation in sectors that use hydrogen and ammonia as a fuel source. Both companies aim to deepen collaboration with Japanese companies regarding hydrogen and ammonia supply chain projects, in order to achieve the goal of realizing a decarbonized society. Also, in its Fourth Medium-term Business Plan, released in June 2021, JBIC aims to respond to energy transformation, toward the realization of a decarbonized society. By developing a framework for collaboration with these entities, JBIC aims to accelerate the structuring of projects for developing the supply chain of hydrogen and ammonia as a fuel source.

JBIC Concludes MOU for Comprehensive Strategic Partnership with Woodside Energy Group Ltd. of Australia and MOU with Petroliam Nasional Berhad (PETRONAS) of Malaysia

Promoting Collaboration for Supply of Energy and Creating Decarbonization Opportunities
Photo of The 2nd Asia Green Growth Partnership Ministerial MeetingThe 2nd Asia Green Growth Partnership Ministerial Meeting

JBIC concluded an MOU for a comprehensive strategic partnership with Australian company Woodside Energy Group Ltd. (Woodside) to secure a stable supply of energy and strengthen collaboration and promote cooperation in the field of decarbonization, and an MOU with Petroliam Nasional Berhad (PETRONAS) to support collaboration between PETRONAS and Japanese companies in clean energy sectors.

Amid the rising importance of energy security, JBIC will continuously work to secure stable supply of energy and aims to strengthen collaboration in new energy fields and low carbon services and promote to form projects in such fields for the realization of decarbonized society.

Addressing Social Issues

JBIC Concludes MOUs with Ministry of Finance, Planning and Economic Development of Uganda, Ministry of Economy and Finance of Côte d’Ivoire, and West African Development Bank

Creating Business Opportunities for Supporting Environmental Preservation Efforts of Japanese Companies in Africa
Photo of BOAD President EKUE and JBIC Governor HAYASHI after concluding the MOUBOAD President EKUE and JBIC Governor HAYASHI after concluding the MOU

JBIC concluded MOUs with the Ministry of Finance, Planning and Economic Development of Uganda, the Ministry of Economy and Finance of Côte d’Ivoire, and the West African Development Bank (BOAD) on the sidelines of the eighth Tokyo International Conference on African Development (TICAD 8) held in Tunisia in August 2022. The objective of the MOUs is to create and promote business opportunities for Japanese companies, which contribute toward the environmental preservation in Africa.

Africa has vast reserves of critical minerals and other natural resources. It is also an area where economic growth and market expansion are expected on the back of high population growth rate. On the other hand, there are many issues to be addressed in Africa, such as development of infrastructure including electricity, diversification of industries, and improvement of medical services. In addition, the issue of food security needs to be addressed. JBIC focuses on Africa in the Action Plan “Undertake strategic initiatives for countries/regions of great importance from the policy perspective.” in the Fourth Medium-term Business Plan (FY2021–FY2023). To this end, we will support Japanese companies to expand their business in Africa in cooperation with the governmental organizations and others in the region in order to promote establishing basic infrastructure and taking climate change measures.

Future Business Strategy

As the energy situation and market conditions have undergone significant changes, energy security has become more important and securing strategically important resources and diversifying suppliers have become urgent issues. While we are required to accelerate the actions for climate change, energy- related challenges have entered a more difficult phase. JBIC will promote efforts toward these global agendas by proactively supporting Japanese companies’ activities to acquire interests in and develop resources overseas and to develop next-generation energy, as well as by enhancing the resilience of supply chains of such commodities as energy resources and mineral resources, while developing fossil fuel and addressing climate change simultaneously.

(1) Addressing Global Issues

As a response to the energy transformation for the realization of a decarbonized society, JBIC will focus on green innovation initiatives, such as the construction of a hydrogen value chain spanning manufacturing, transportation, and supply to utilization, and green mobility (green finance).

Moreover, JBIC will support initiatives for co- combustion of ammonia and hydrogen, CCS/CCUS*1, and the natural gas business (natural gas conversion, expansion of use, etc.) in emerging countries centered around Asia, and will also continuously support projects for reducing CO2 emission in the steel and smelting industries, in order to contribute toward the expansion of businesses that help reduce the environmental impact while actively participating in the sustainable energy transition by host countries (transition finance). 

Also, JBIC will actively support projects that contribute toward solving such social issues as access to basic infrastructure, including medical services and food supplies, in emerging countries including African nations for sustainable growth of host countries. Additionally, with TICAD9 to be held in Japan in 2025 in mind, JBIC will support Japanese companies to expand their business in Africa (social impact finance).

(2) Responses for Building an International Supply Chain for Critical Minerals

JBIC will strengthen its initiatives for building an international supply chain by securing the important minerals known as critical minerals, including rare metals, such as nickel and lithium, as well as copper, which is essential for realizing a decarbonized society.

As a significant growth of demand is anticipated for such metals as copper and lithium, highly innovative initiatives, including advanced recycling, will be needed in securing important minerals in order to realize carbon neutrality in 2050. Securing important minerals, however, involves challenges. For example, for a lot of minerals, the mining, refining, and smelting technologies are yet to be established and reserves are unevenly distributed, making certain countries and regions the center of production and processing. In its Green Growth Strategy, the government of Japan stated that it would muster all possible and necessary policies. From a medium-to long-term perspective, JBIC will actively support efforts toward decarbonization in this field to play a part in the initiatives.

Note
  1. *1
    Carbon dioxide Capture and Storage (CCS) is a technology that separates and captures carbon dioxide that would become a greenhouse gas and stores it in deep waterbeds or geological formations. Carbon dioxide Capture, Usage and Storage (CCUS) is a technology that utilizes carbon dioxide separated and stored.
Introduction of the Finance Groups