- Region: Africa
- Infrastructures
- Manufacturing and Services
- Untied Loans
- Guarantees
March 27, 2009
- The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1 signed on March 26, 2009 an untied loan agreement totaling up to 35 billion yen with Transnet, a 100% South African state-owned freight rail, ports and pipeline company in South Africa. The loan was cofinanced with three commercial banks: the Bank of Tokyo-Mitsubishi UFJ (agent bank), Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation (SMBC). JBIC also provided guarantee for the portion cofinanced by them.
- The loan will finance the Entrance Channel Widening and Deepening Project at Port of Durban undertaken by Transnet with the aim of enabling larger vessels to enter the Port of Durban in South Africa.
- South Africa where many Japanese affiliate companies have located their operations in recent years is an important production and export base. The Port of Durban is the busiest port in the South Africa and one of the busiest container ports in Southern hemisphere. Not only does the port serve as a gateway to the industrial hinterland of Johannesburg as a major South African city but also serve as gateway to neighbouring countries including Botswana and thus a gateway to the country's economy. Furthermore, it is a transit point of freight traffic from the neighboring countries, thus serving as a hub port for the southern African region. In particular, the port has become an important export and import base for Japanese auto-related affiliates operating in this region.
- Cargo-handling volumes at the Port of Durban have been reaching its capacity in recent years following economic growth of South Africa. Currently unscheduled cases occur where ships have to anchor off the port, waiting for their turn to enter the port. As a result, local Japanese affiliates are forced to increase their inventories of imported parts and extend storage time for their export products. The loan will support the project aiming to expand the port's cargo-handling capacity and to relieve its congestion, thereby improving business environment for Japanese overseas operations, which will serve expectations for the port expansion.
- The Republic of South Africa launched the Accelerated and Shared Growth Initiative for South Africa (ASGISA) in February 2006, as its medium-term growth strategy. Recognizing the importance of South Africa for Japan, JBIC signed a Declaration of Intent on comprehensive strategic partnership with its government to support the projects undertaken under ASGISA. This loan constitutes a part of JBIC's cooperation for addressing the country's important policy agenda and is thus expected to contribute to closer ties between South Africa and Japan.
- During the Fourth Tokyo International Conference on African Development (TICAD IV), held in Tokyo in May 2008, the Government of Japan unveiled financial assistance totaling up to US$2.5 billion to be extended over the next 5 years. JBIC will remain committed to assisting improvement of local business environment for Japanese affiliates and expanding trade and investment ties between South Africa and Japan.