- Region: Latin America and the Caribbean
- Machinery and Equipment
- Export Loans
April 18, 2013
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed on April 17(Honduras time) a general agreement with Banco Centroamericano de Integración Económica (BCIE)*1, for offering an export credit line*2 amounting to the equivalent of 30 million U.S. dollars (JBIC portion) to finance Japanese exports to countries in Central America and others. The credit line is cofinanced*3 with private financial institutions, which brings the overall cofinancing amount to the equivalent of 50 million U.S. dollars.
- Under this agreement, an export credit line is offered to BCIE to extend medium- and long-term loans in U.S. dollars to local companies in Central American countries for the purchase of Japanese general machinery and equipment related to renewable energy*4, the sector of climate change mitigation*5 and sector of water industry*6. Thus, the credit line is supporting the expansion of Japanese exports to countries in Central America and others.
- In recent years, there have been growing expectations for Japanese exports of machinery and equipment to countries in Central America and others, with growing investment opportunity in various projects based on: continuation of stable economic growth; conclusion of the free trade agreement with the United States; development of the regional project performing various actions for sustained development of the regional economy; development of renewable energy focusing on geothermal energy. This credit line will support to expand the export of machinery and equipment to countries in Central America and others, thereby contributing to maintaining and improving the international competitiveness of Japanese industries.
- Since the 1960s, JBIC and BCIE have built close cooperative ties by offering the export credit lines*7 and most recently credit line under GREEN operations*8 in December 2011, to export Japanese machinery and equipment to countries in Central America and others. JBIC will continue to financially support the expansion of Japanese companies' export of machinery and equipment to countries in Central America and others, in collaboration with such multilateral and regional institutions such as BCIE, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
- *1 BCIE was founded in 1960 by 5 Central American countries of Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica, to promote economic integration and balanced economic and social development of the Central American countries. Currently, it also has the non-regional members of Mexico, Taiwan, Argentina, Colombia, Spain, Dominican Republic and Panama. Head quartered in Tegucigalpa, Honduras.
- *2 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.
- *3 Nippon Export and Investment Insurance (NEXI) will provide Buyer's Credit Insurance for the portion cofinanced by private financial institutions.
- *4 This includes geothermal, wind, biomass, solar photovoltaic and solar thermal energy power generation.
- *5 This includes thermal power plant with CCS facility, CCS projects, waste to energy projects, hybrid power plants, combined heat & power projects, district heating and/or cooling related projects. 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 This includes infrastructure for the supply of drinking water, wastewater collection and treatment facilities, and the modernization of such facilities.
- *7 See Press release on August 6, 2004.
- *8 See Press release on December 1, 2011.