- Region: Africa
- Machinery and Equipment
- Export Loans
March 30, 2012
- The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1signed today a loan agreement with the African Export-Import Bank (Afreximbank) for extending an export credit line*2totaling up to 60 million U.S. dollars (JBIC portion). The loan is cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (Agent). The overall cofinancing amount reaches 100 million U.S. dollars, with Nippon Export and Investment Insurance (NEXI) providing Buyer's Credit Insurance for the cofinanced portion.
- This credit line, offered to Afreximbank, is intended to provide medium and long-term loans in U.S. dollars to finance, through Afreximbank, the purchase of machinery, equipment and services by African companies from Japanese exporters, thereby supporting expansion of Japanese exports to African countries. JBIC and Afreximbank signed a memorandum of understanding (MOU) on operational cooperation in May 2010.*3 This is part of an outcome of the cooperation based on this MOU.
- African countries have achieved remarkable economic development. According to African Economic Outlook, their overall GDP grew by 3.7% in fiscal 2011 from the previous fiscal year, and is forecast to grow 5.8% in fiscal 2012. In recent years, there have been businesses paying attention to African countries' demand for infrastructure development, spurred by economic growth and their expanding consumer markets, resulting in increasingly intensive competition for capturing markets. It is hoped that this loan will help sustainable growth in this region through financial support for Japanese exports to African countries.
- In the Fourth Tokyo International Conference on African Development (TICAD IV) held in May 2008, the Government of Japan pledged that JBIC would provide financial support totaling up to 2.5 billion U.S. dollars to Africa over a 5-year period. This loan will serve toward this pledge. Looking toward the future, JBIC intends to support the expansion of Japanese business activities in Africa by drawing on its various financial instruments and schemes for structuring projects, and by performing its risk-assuming function.
- *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
- *2 An export credit line is a form of export credit in which JBIC makes a commitment of a certain amount of money as a loan to a foreign bank or other entities to finance the export of machinery and equipment from Japan.
- *3 See News Release on May 28, 2010.