- Region: Asia
- Manufacturing and Services
- Overseas Investment Loans
December 7, 2012
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed today a loan agreement amounting to 60 million U.S. dollars (JBIC portion) with ICICI Bank Limited (ICICI Bank)*1, India's largest private sector bank. The loan is cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU). The total cofinancing amount is 100 million U.S. dollars and JBIC provides a guarantee for part of the cofinanced portion.
- This loan through ICICI Bank will finance Jamshedpur Continuous Annealing & Processing Company Private Limited (JCAPCPL), which is a joint venture of Nippon Steel & Sumitomo Metal Corporation (NSSMC) and Tata Steel Limited (TSL), for manufacturing and sales of cold rolled steel sheets in Jamshedpur, the State of Jharkhand in India, to meet growing demand for high grade steel sheets for automobiles in fast-growing India. Cold rolled steel sheets manufactured by JCAPCPL will be sold as high grade ones to automobile and auto-parts manufacturers in India and its neighboring countries. Furthermore, JBIC has separately signed a loan agreement with JCAPCPL for the necessary funding to this business operation in November 2012*2.
- Amid globally ongoing intense competition in the steel industry, NSSMC has put forward the global operation of steel business as one of its key management policies. Given these policies, the Indian automobile market is expected to grow over the medium and long term, and demand for high grade cold rolled steel sheets for automobiles, in which NSSMC has strength, is foreseen to increase in parallel to this trend. Thus NSSMC intends to boost the local manufacturing of steel sheets for automobiles in the joint venture with TSL and is planning to supply the products to Japanese and Western automobile and auto-parts manufacturers. The loan will thus contribute to maintaining and improving the international competitiveness of the Japanese steel industry by supporting NSSMC's overseas business operation.
- JBIC and ICICI Bank have built close ties through loan commitments that are/were designed to support the following initiatives: the development of the local supporting industries, which is significant for the Japanese companies operating in India as well; trade finance during the financial crisis; renewable energy and energy efficiency projects; and export of thermal power plant facilities. JBIC will continue to support the business deployment of Japanese companies in such growing markets as India by cooperating with local financial institutions, drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.
- *1 ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank and the second largest bank in the country, with consolidated total assets of US $ 119 billion at September 30, 2012.
- *2 See Press Release on November 20, 2012.