- Region: The Middle East
- Export Loans
October 9, 2012
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed on October 5, a general agreement with Turkiye Is Bankasi A.S. (Isbank), the largest commercial bank in terms of assets in Turkey, for the purpose of offering an export credit line*1 amounting to the equivalent of 60 million U.S. dollars (JBIC portion) to finance the sector of renewable energy and climate change mitigation (henceforth, “renewable energy and other related sectors”). The credit line is cofinanced with private financial institutions*2, which brings the overall cofinancing amount to the equivalent of 100 million U.S. dollars. This is the first credit line offered by JBIC to Turkey that specializes in supporting the export of machinery and equipment in the field of renewable energy and other related sectors.
- Under this agreement, an export credit line is set up for Isbank to finance Turkish local companies in the purchase of Japanese machinery and equipment in the field of renewable energy (including those for geothermal, windpower, biomass and solar (thermal and photovoltaic) power generation) and climate change mitigation (including those for thermal power plants equipped with Carbon dioxide Capture and Storage (CCS) facilities*3, hybrid power generation plants*4, cogeneration projects and regional air-conditioning-related facilities). This export credit line will provide medium- and long-term loans, either in yen or in U.S. dollars, to finance these exports through Isbank, thus providing financial support for expanding the export of Japanese machinery and equipment to Turkey.
- The Turkish government has intensified efforts to propagate power generation harnessing renewable energy as part of its environmental policy and has set a target for the share of renewable energy to reach 30% of total energy consumption by 2023. Moreover, the Turkish government is making efforts to modernize and retrofit existing power stations, as they will help mitigate climate change. This credit line will support the export of machinery and equipment in the field of renewable energy and other innovative efforts to Turkey by Japanese companies, thereby contributing to maintaining and improving the international competitiveness of Japanese industries.
- JBIC and Isbank have built close cooperative ties over the years with bank loans that supported the export of ships built in Japanese shipyards. JBIC will continue to support Japanese companies' export of machinery and equipment including those in the field of renewable energy and other related sectors, in collaboration with such foreign financial institutions, 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 its client ( 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 generation is a form of electric power generation that combines renewable energy and fossil fuels as heating sources.