Project Financing for Intercity Express Programme in the UK
Supporting Japanese Company's Overseas Railway Project with Pound Sterling Loan

• Region: Europe
• Infrastructures
• Overseas Investment Loans
• Project Finance

1. The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed on April 15 (local time) a loan agreement totaling up to about GBP860 million (JBIC portion) with Agility Trains East Limited (ATEL) in Great Britain (the UK), where Hitachi, Ltd. (Hitachi) holds an equity stake, to fund the East Coast Main Line segment of the Intercity Express Programme (the "Programme"). The loan, provided in project financing,^*1 is cofinanced with private financial institutions comprising The Bank of Tokyo-Mitsubishi UFJ, Ltd.; Sumitomo Mitsui Banking Corporation; Mizuho Bank, Ltd.; Sumitomo Mitsui Trust Bank, Limited; Mitsubishi UFJ Trust and Banking Corporation; Société Générale, Crédit Agricole Corporate and Investment Bank, Lloyds Bank plc, and HSBC Bank plc; as well as the European Investment Bank. The overall cofinancing amount adds up to approximately GBP2 billion. Nippon Export and Investment Insurance (NEXI) provides Overseas Untied Loan Insurance for the portion cofinanced by private financial institutions.
    
2. In this project, the loan in pound sterling currency will finance ATEL, a joint venture set up by Hitachi and John Laing Investments Limited that makes investments in public sector infrastructure globally, for procuring the rail car , developing railway depots for maintenance, and leasing those trains to the train operator of the East Coast Main Line with maintenance service for a period of about 30 years. JBIC has also supported Phase 1 of the Programme, which covered the Great Western Main Line, with a project finance loan in July 2012.^*2
    
3. This loan is intended to support with long-term funding in pound sterling a railway project of Hitachi in the UK, which has been actively developing social capital by making use of private sector funds. Thus it will contribute to maintaining and strengthening the international competitiveness of Japanese industries. Moreover, it will help create business opportunities for Japanese companies in the UK where demand for rail car replacement is projected to increase. In addition, this loan is expected to serve to strengthen economic ties between Japan and the UK, as it supports this segment integrally with Phase 1 in this Programme, which is designated one of the highest priority projects by the British government.
    

4. As Japan's policy-based financial institution, JBIC will continue to support overseas business deployment of Japanese companies, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.

Note

1. *1 Project finance is a financing scheme in which repayments are made solely from cash flows generated by the project and secured only on the project assets.
2. *2 See Press Release on July 25, 2012.