- Region: The Middle East
- Export Loans
November 19, 2012
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed a general agreement with Yapi ve Kredi Bankasi A.S. (Yapi Kredi), a commercial bank in Turkey, for the purpose of offering an export credit line*1 amounting up to the equivalent of 90 million U.S. dollars (JBIC portion) to finance the sector of renewable energy and climate change mitigation (henceforth, “renewable energy and other related sectors”).*2 *3 The credit line is cofinanced with private financial institutions, *4 which brings the overall cofinancing amount to the equivalent of 150 million U.S. dollars. This is the 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 offered to Yapi Kredi to finance Turkish local companies in the purchase of Japanese machinery and equipment in the field of renewable energy (including those for geothermal, wind power, 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,*5 hybrid power generation plants,*6 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 Yapi Kredi, 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 Yapi Kredi have built up close cooperative ties over the years through bank-to-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 to Turkey, in collaboration with such foreign financial institutions, 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 Although the loan agreement was already concluded on November 14, 2012, the press release was issued today, after the related procedures of relevant parties were completed.
- *3 JBIC has separately signed on November 14, 2012, a general agreement with Yapi Kredi for the purpose of offering an export credit line amounting up to the equivalent of 210 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). See Press Release on November 19, 2012.
- *4 Nippon Export and Investment Insurance (NEXI) will provide Buyer's Credit Insurance for the portion cofinanced by private financial institutions.
- *5 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.
- *6 Hybrid power generation is a form of electric power generation that combines renewable energy and fossil fuels as heating sources.