- Region: Asia
- Machinery and Equipment
- Export Loans
Octorber 27, 2014
The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Watanabe) signed on October 24 three buyer's credit (export loan) agreements totaling up to about JPY22.4 billion, USD392 million and EUR102 million (JBIC portion) respectively with the Government of Turkmenistan acting through the State Bank for Foreign Economic Affairs of Turkmenistan (TVEB). These loans are cofinanced with Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation and the Tokyo branch of Deutsche Bank AG. Nippon Export and Investment Insurance (NEXI) will provide insurance for the portions cofinanced by private financial institutions. The total cofinancing amount of each of these loans is about JPY37.4 billion, USD653 million and EUR170 million.
These loans will fund the State Concern "Turkmengaz," Turkmenistan's state-owned gas company, for purchasing a whole set of plant facilities from Kawasaki Heavy Industries, Ltd. and other companies, as it constructs a new Gas to Gasoline plant for producing gasoline by using natural gas as raw material near Ashgabat City, Ahal Province, in Turkmenistan.
The gasoline produced from this plant is expected to be mainly sold domestically for automobile fuel and others and partly exported to the neighboring countries. Thus it will meet domestic fuel needs and also contribute to the country's policy agenda of increasing value-added of the natural gas it produces.
During the visit of President Gurbanguly Berdimuhamedov of Turkmenistan to Japan in September 2013, the Japanese government expressed cooperation for economic development of Turkmenistan and support for the export of petrochemical plants, among others, to the country in the "Joint Statement between Japan and Turkmenistan on the New Partnership"announced in the Japan-Turkmenistan Summit. JBIC's support for the export of this plant by Japanese companies through these loans is consistent with such policy of the Japanese government. In Turkmenistan which sustains high economic growth, while diversifying the energy sector, demand for new construction of plants in the oil and gas sector is expected in the coming years. Thus JBIC's support through these loans will help create business opportunities for Japanese companies in the oil and gas sector of Turkmenistan, thereby contributing to maintaining and strengthening the international competitiveness of Japanese industries.
As Japan's policy-based financial institution, JBIC will continue to support Japanese companies for their export of plant machinery and equipment, as well as their overseas business deployment, by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.