- Region: Africa
- Machinery and Equipment
- Export Loans
March 28, 2013
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed on March 27, a loan agreement for offering an export credit line1 amounting up to 60 million U.S. dollars (JBIC portion) with The Development Bank of Southern Africa (DBSA), a development finance institution wholly owned by the Government of the Republic of South Africa. The credit line is cofinanced with Mizuho Corporate Bank, Ltd. (lead arranger) and The Bank of Tokyo-Mitsubishi UFJ, Ltd.2, which brings the overall cofinancing amount to 100 million U.S. dollars.
- DBSA is a development finance institution in South Africa established to provide financial support as well as advisory and other services for advancing socioeconomic development and raising the standards of living of the peoples in the African region including Southern Africa. DBSA is playing a significant role mainly in funding infrastructure development in Southern Africa, as well as in other African region. Many Southern African countries are endowed with abundant resources, including oil, natural gas and rare metals, and their recent economic growth has been expanding demand for infrastructure. At the same time, as Japanese companies have increasing interest in these countries for export business of machinery and equipment, as well as other products and services, there have been growing expectations on the major role JBIC should play therein.
- This credit line is intend to finance the local companies, as they purchase machinery and equipment, as well as other products and services, from Japan through DBSA in infrastructure and other projects in the African region including Southern Africa. It will thus contribute to maintaining and improving the international competitiveness of Japanese industries through financial support for exports of Japanese companies to African countries3.
- 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 the next 5-year period. In June this year, the Fifth Tokyo International Conference on African Development (TICAD V) is scheduled to be held in Yokohama City. This agreement will therefore contribute to showcasing Japan’s efforts in this Conference.
- In cooperation with such overseas government-affiliated financial institutions, JBIC will support the expansion of Japanese businesses in Africa by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.
- *1 An export credit line is a form of export credit in which JBIC makes a commitment of the maximum amount of credit to be extended to foreign banks or other entities to finance the export of machinery and equipment from Japan.
- *2 Nippon Export and Investment Insurance (NEXI) will provide Buyer's Credit Insurance for the portion cofinanced by private financial institutions.
- *3 The countries covered by this credit line are in and around Southern Africa where DBSA operates. As of March 2013, they comprise 14 countries: the United Republic of Tanzania, the Republic of Zambia, the Republic of Botswana, the Republic of Mozambique, the Republic of Angola, the Republic of Zimbabwe, the Kingdom of Lesotho, the Kingdom of Swaziland, the Republic of Malawi, the Republic of Namibia, the Republic of South Africa, the Republic of Mauritius, the Democratic Republic of Congo and the Republic of Seychelles.