- Region: The Middle East
- Export Loans
March 29, 2013
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed on March 28, a general agreement with T. Garanti Bankasi A.S. (Garanti Bank), the major commercial bank in Turkey, for offering an export credit line*1 amounting up to the equivalent of 300 million U.S. dollars (JBIC portion) to finance Japanese exports to Turkey and its neighboring countries (including in the Middle East, Central Asia and North Africa). The credit line is cofinanced*2 with private financial institutions which brings the overall cofinancing amount to the equivalent of 500 million U.S. dollars.
- Under this agreement, an export credit line is offered to Garanti Bank to extend loans to local companies in Turkey and its neighboring countries for the purchase of Japanese machinery and equipment for infrastructure development; as well as those related to renewable energy (such as geothermal, wind, biomass, solar photovoltaic and solar thermal energy); and those related to the sector of climate change mitigation (such as thermal power plants with CCS*3 facilities, CCS projects, waste to energy projects, hybrid power*4 plants, combined heat & power projects, district heating and/or cooling related projects). This export credit line will thus provide medium- and long-term loans, either in yen or in U.S. dollars, through Garanti Bank, thus supporting the expansion of the export of Japanese machinery and equipment to these countries.
- In recent years, there have been growing expectations for Japanese exports of machinery and equipment to Turkey and its neighboring countries through collaboration between Japanese and Turkish companies. Under these circumstances, there has been growing interest in a variety of export businesses, and expectations on the major role JBIC should play therein. This credit line will support the export of machinery and equipment to these countries, thereby contributing to maintaining and improving the international competitiveness of Japanese industries.
- JBIC and Garanti Bank have built up close cooperative ties by signing the memorandum of understanding*5 in November 2012 to exchange information and explore the future cooperation in financing. JBIC will continue to support Japanese companies' overseas business deployment including export of Japanese machinery and equipment related to renewable energy, in collaboration with such overseas financial institutions in Turkey and its neighboring countries, by drawing on its various financial facilities and schemes for structuring projects, and by 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 Carbon dioxide Capture and Storage (CCS) is a technology that separates and captures carbon dioxide, the main culprit behind global warming, from emissions from fossil fuel power plants and stores it in deep waterbeds or geological formations.
- *4 Hybrid power is a form of power generation that combines renewable energy and fossil fuels as heating sources.
- *5 See Press release on November 19, 2012.