- Region: Asia
- Energy and Natural Resources
- Overseas Investment Loans
January 29, 2015
The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed two loan agreements totaling up to USD58.8 million and USD254.9 million (both denote JBIC portions), respectively, with Mitsubishi Corporation (MC).*1 The loans are cofinanced with private financial institutions.
These loans provide MC with funds required for MC to develop upstream natural gas fields and construct and operate an LNG plant with an annual production of 2 million tons jointly with Korea Gas Corporation, PT. Pertamina (Persero), the state oil company of Indonesia, and PT. Medco Energi Internasional Tbk. in the central region of the eastern coast of Sulawesi Island.*2
In the aftermath of the Great East Japan Earthquake, the Japanese energy environment has become increasingly hard. In particular, it is an important policy issue for Japan to secure a stable supply of LNG, which, at present, accounts for more than 40 percent of the composition of its power sources. Thus the "New Strategic Energy Plan" decided by the cabinet in April 2014, advocates the diversification of LNG supply sources. Although Indonesia used to be the largest LNG exporter to Japan until the first half of the 2000s, import volume from the country has been decreasing in recent years and is expected to continue to decrease in the future. Given this prospect, Japanese electric power companies plan to take delivery of more than 60 percent (1.3 million tons per year) of LNG produced in this project. Thus JBIC's support for this project will contribute to diversify the supply sources of LNG and securing its stable supply for Japan.
As Japan's policy-based financial institution, JBIC will continue to support Japanese companies for promoting the development and acquisition of energy resources, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
- *1 Of the aggregate amount, a loan agreement for up to USD58.8 million was signed on January 16, 2015, but the Press Release was issued today together with the signing of a loan agreement for USD254.9 million.
- *2 JBIC signed a loan agreement for this project in which funds were provided in project financing in November 2014. See Press Release on November 14, 2014, for details.