- Region: Latin America and the Caribbean
- Infrastructures
- Untied Loans
- Guarantees
December 10, 2008
- The Japan Bank for International Corporation （JBIC ; President & CEO : Hiroshi Watanabe） *1signed a loan agreement on December 9 totaling US$800 million with the Panama Canal Authority(Autoridad del Canal de Panamá：ACP) in the Republic of Panama for the Panama Canal expansion project. The loan amount was provided in cofinancing with the Bank of Tokyo-Mitsubishi UFJ (joint arranger) and Sumitomo Mitsui Banking Corporation (joint arranger) with JBIC providing a guarantee for the cofinanced portion.
- The expansion of the Panama Canal will build a new lane of traffic along the canal through the construction of a new set of locks, which will double capacity and thus allow more traffic and longer, wider ships. Since the Panama Canal is the vital shipping route connecting the East Coast of North America with Japan and Asia, it is a crucial pathway for Japanese international shipping. In fact, ships originating from and destined for Japanese ports accounted for 14% of all traffic in 2007, making Japan the third-largest user of the canal.
- Expansion will increase the canal's capacity and enable the transit of larger, wider and longer post-Panamax vessels*2 . In addition, since its capacity of handling cargo will double, larger ships making a detour to other shipping lanes will be able to navigate the canal, reducing the waiting time caused by congestion. As a result, Japanese shippers and exporters may benefit from lower shipping costs due to shorter shipping times. Aframax*3 tankers and LNG tankers will also be able to transit the canal, which will facilitate efficient imports of crude oil and LNG from South American countries. The project is expected to diversify and stabilize imports of natural resources to Japan.
- Five multilateral and development agencies signed agreements to finance a total of US$2.3 billion of the US$5.25 billion cost of the expansion project. The other multilateral and development agencies from which the ACP will receive loans are: the Inter-American Development Bank (IDB), International Finance Corporation (IFC), European Investment Bank (EIB) and Corporación Andina de Fomento (CAF; Andean Development Corporation). JBIC will support this project in cooperation with these multilateral institutions, which will contribute to maintaining and improving the international competitiveness of Japanese industries and securing a stable supply of natural resources to Japan.
- *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
- *2 A Panamax vessel is the largest ship which can pass through the Panama Canal with a full load of cargo. A Panamax carrier is usually 32.2m wide to fit through dimensions of the canal's lock chambers. A Panamax container ship typically would be around 4,000 TEU in size. A Post-Panamax vessel is the largest ship which will be able to fit in the canal after expansion. Measuring 48.8m in width, Post-Panamax class vessels include 12,000-TEU large container ships, Aframax tankers with a capacity of 110,000 dwt, and large LNG carriers.
- *3 AFRA (Average Freight Rate Assessment) denotes maritime freight rates published by the London Tanker Brokers Panel since April 1954. Generally, an Aframax ship is an oil tanker with a capacity of between 80,000 dwt and 120,000 dwt.