- Region: Latin America and the Caribbean
- Machinery and Equipment
- Export Loans
Aug. 6, 2004
- Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Sinozawa) on July 29 signed a loan agreement with the Central American Bank for Economic Integration (Banco Centroamericano de Integración Económica (BCIE; President: Harry Brautigam))*1 in Tegucigalpa, the Republic of Honduras, offering to BCIE a dual currency credit line, denominated in yen and US dollar, for an aggregate amount equivalent to up to 100 million US dollars.*2 This will be co-financed with private financial institutions.
- The credit line will support exports by Japanese firms to the Central American region by providing loans via BCIE to regional public bodies and private businesses in BCIE member countries when they import machinery and equipment from Japanese firms.
- Central American countries, where economic growth has been relatively stable in recent years, have been making various efforts to achieve sustainable economic development in the region, including the signing of free trade agreements with the United States and the preparation of a regional development program. Thus there is potential in increasing capital investment opportunities in the region.
- Since 1969, JBIC has provided a total of nine yen-denominated credit lines for BCIE to finance Japanese export transactions. This is the first credit line to BCIE denominated both in yen and US dollar. In this region, where trade transactions are mostly made in US dollar, this dual currency loan will help to increase the competitive advantage of Japanese exports when Japanese firms vie with foreign firms for transactions involving the purchase of equipment by importers from overseas.
- JBIC would likely help in expanding business opportunities for Japanese firms in Central America by supporting plant exports through the strengthening of ties it has developed with BCIE.
- *1 BCIE is an international financial institution founded in 1960 by Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica to promote regional integration and a balanced economic development in the Central American region. Apart from the regional members above, the Bank's membership has grown to include the extra-regional members of Mexico, Taiwan, Argentina, Colombia and Spain. BCIE is headquartered in Tegucigalpa, Honduras.
- *2 Export credit line is a form of export financing to promote equipment exports from Japan. A loan is extended to an importer of Japanese equipment through the importing country's financial institution to which JBIC has offered a credit line.