- Region: Oceania
- Energy and Natural Resources
- Securitization and Other Financial Instruments
October 10, 2014
The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed on October 9 a transfer contract of a loan asset with the Sumitomo Mitsui Trust Bank, Limited for partial transfer of the project finance loan structured and owned by JBIC for Roy Hill Holdings Pty Ltd. that undertakes the project of developing and operation of Roy Hill Iron Ore Mine and related infrastructure (Roy Hill Project).*1
In this contract, as private financial institutions are expected to have needs for participating in financing the Roy Hill Project with favorable progress of the Roy Hill Project, JBIC has made partial transfer of the loan structured and owned by JBIC.
The Japanese government has launched the policy of establishing a cycle of directing domestic private funds to financing growth. This policy set out that for overseas projects, JBIC structures financing to create investment opportunities for private financial institutions through transfer of loan assets to mobilize private sector funds. Thus, this arrangement is consistent with the policy measures of the Japanese government.
Furthermore, as infrastructure and natural resource projects are getting larger, financial demand is also increasing substantially, and the continuous provision of long-term funds to these projects by active utilization of private sector funds poses a major international challenge being discussed in the arenas of G20 (the summit on financing in the global economy) and Asia-Pacific Economic Cooperation (APEC).
JBIC will continue not only to showcase project structuring and its risk-assuming function by drawing on its various financial schemes, but also the increase of investors in private financial institutions through an effort like this. Thereby, JBIC also intends to tackle the promotion of mobilizing private sector funds in overseas projects undertaken by Japanese companies.