- Region: Asia
- Machinery and Equipment
- Export Loans
April 1, 2015
The Japan Bank for International Cooperation (JBIC; Governor, CEO: Hiroshi Watanabe) signed on March 31 a loan agreement amounting up to USD18 million (JBIC portion) for setting up an export credit line*1 with Indonesia Eximbank, a governmental financial institution of the Republic of Indonesia (Indonesia). The credit line is cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (lead arranger) and Sumitomo Mitsui Banking Corporation, with Nippon Export and Investment Insurance (NEXI) providing Buyer's Credit Insurance for the cofinanced portion by private financial institutions. The overall cofinancing loan amounts to USD30 million.
The credit line is intended to provide Indonesian companies through Indonesia Eximbank with medium and long-term financing in USD, which is necessary for purchasing machinery, equipment and services from Japan. This is JBIC's third loan agreement to Indonesia Eximbank, following the first loan agreement for supporting trade finance (Untied Loan) with Indonesia Eximbank in October 2009*2 and the second loan agreement for an export credit line in February 2012.*3
Given expectations for the potential of future growth in the Indonesia's domestic market based on the country's solid economic growth, Japanese companies have strong interest in Indonesia*4 as a promising country for their business deployment. This credit line will contribute to further strengthening the economic relationship between the two countries, by financially supporting exports from Japanese companies to Indonesia.
As Japan's policy-based financial institution, JBIC intends to provide continuous support for the expansion of export business of Japanese companies to Indonesia, in collaboration with Indonesia Eximbank, which is responsible for the execution of economic and development policy of the Government of Indonesia, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
- *1 An export credit line is a form of export financing in which JBIC makes a commitment to provide a maximum amount of credit to be extended to the borrower (foreign banks or other entities) to finance exports of machinery, equipment and services from Japan.
- *2 See Press Release October 26, 2009.
- *3 See Press Release February 7, 2012.
- *4 Indonesia ranked second in the categories of "Most Promising Countries/Regions for Overseas Operations over the Medium-term (next 3 years or so)" and "Most Promising Countries/Regions for Overseas Operations over the Long-term (next 10 years or so)" in "JBIC's FY2014 Survey (the 26th) on Overseas Business Operations of Japanese Manufacturing Companies" published on November 28, 2014. See Press Release for details November 28, 2014.