- Region: Asia
- Machinery and Equipment
- Export Loans
June 6, 2013
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed today a general agreement with the Ministry of Economic Development of the Government of Mongolia, for offering the first export credit line*1 amounting to the equivalent of 8 billion yen. The credit line is cofinanced with private financial institutions, with Nippon Export and Investment Insurance (NEXI) providing Buyer's Credit Insurance for the portion cofinanced by private financial institutions.
- This credit line was materialized, as a result of having pushed forward discussion, based on the MOU*2 signed in March 2012 between JBIC and the Ministry of Finance of Mongolia, for the purpose of enhancing financial cooperation. This credit line is first extended to Mongolia to provide medium- and long-term financing in Japanese yen or U.S. dollars for the purchase of Japanese machinery and equipment by Mongolian local companies, as part of the ERCH Initiative*3 proposed in expectation of promoting the economic relationship between the two countries upon Prime Minister Abe's visit to Mongolia this March.
- Mongolia attained 17.3% annual real GDP growth in 2011, and is sustaining brisk growth performance. Endowed with abundant coal, copper and other natural resources, Mongolia has increasingly become important for Japanese companies as a promising country for expansion of their business opportunities, including increased exports from Japan of construction machinery for infrastructure development associated with mineral resource development projects. It is expected that supporting Japanese companies' exports to Mongolia through this credit line will contribute to maintaining and improving the international competitiveness of Japanese industries, as well as strengthening the economic relationship between the two countries.
- JBIC will continue to support the overseas business deployment and export of machinery and equipment of Japanese companies to foreign countries, including Mongolia.
- *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 See Press Release on March 12, 2012.
- *3 The ERCH Initiative with two pillars of (1) development of investment/business environment and (2) cooperation for Mongolia's sustainable economic development was proposed by Mr. Shinzo Abe, the Prime Minister of Japan, upon his visit to Mongolia in March 2013.