- Region: Latin America and the Caribbean
- Export Loans
October 28, 2005
- Japan Bank for International Cooperation (JBIC; Governor: Kyosuke Shinozawa) signed a loan agreement on October 27 in Caracas totaling up to 15.8 billion yen with the Government of the Bolivarian Republic of Venezuela. The loan (buyer's credit*1) is co-financed with Mizuho Corporate Bank, Ltd. (agent bank), Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi, and Société Générale Bank (Tokyo Branch).
- This loan will support exports of railway-related equipment from Japan, including a set of railway car maintenance depot facilities, control equipment, and signal and communications equipment, for which an international consortium including Marubeni Corporation has been awarded a contract by the Instituto Autonomo de Ferrocarriles del Estado (IAFE), the national railway company in Venezuela wholly owned by the government. IAFE is currently implementing a new railway construction project aimed at improving traffic conditions in the Caracas metropolitan area by providing a 45-km linkage between Caracas, the capital city, and Tuy Medio, a neighboring city. In 1992, when the same international consortium was awarded a contract for railway-related equipment including railway cars, rail tracks, and signal and communications equipment, JBIC and Japanese private banks provided a loan totaling 14.7 billion yen for their export. The new loan will support the export of additional equipment necessary for the completion of the project. The utilization of Japanese advanced technology is expected to contribute to safe and efficient railway operations. JBIC continues to support transport infrastructure development in Venezuela by supporting Japanese firms in receiving orders.
- The Caracas metropolitan area, the center of the Venezuelan economy, is facing a major problem of chronic traffic congestion caused by excessive concentration of population and industries. This project is expected to alleviate serious traffic jams in the city by constructing a mass transit system which links the city of Caracas and suburban cities for commuters. It is also expected to develop the neighboring cities and lessen overpopulation in Caracas.
- This is the first loan from JBIC to Venezuela in five years, the last being in September 2000. The loan is expected to boost chances for Japanese firms to receive orders for exports to Venezuela, thereby contributing to closer trade relations between the two countries. JBIC intends to provide active and continuous support for plant exports and other business activities by Japanese firms involving Venezuela, as it is one of the major oil, gas and other resource producing countries in the world and a promising export market for transport and resource-related plants.
- *1 Buyer's credit is a financial instrument extended directly to an importer in the receiving country to finance the purchase of machinery and equipment from Japan.