- Region: Africa
- Machinery and Equipment
- Export Loans
The Japan Bank for International Cooperation (JBIC; Governor: Akira Kondoh) signed on August 27 a loan agreement amounting up to USD40 million (JBIC portion) for setting up an export credit line*1 with the Eastern and Southern African Trade and Development Bank, a regional multilateral development institution (PTA Bank; See Attachment for the bank’s outline), taking the opportunity of the 6th Tokyo International Conference on African Development (TICAD VI) held in Nairobi, Kenya. The loan is cofinanced with Sumitomo Mitsui Banking Corporation, bringing the overall cofinancing amount to USD80 million, with Nippon Export and Investment Insurance (NEXI) providing insurance for the portion financed by the private financial institution.
The credit line is intended to provide business operators mainly in Sub-Saharan Africa, through PTA Bank, funds for purchasing machinery and facilities from Japan. Demand for machinery and facilities, which are needed for economic development, is expected to continue to expand in Sub-Saharan Africa. Given such circumstances, this credit line set up with PTA Bank, which has customers across 19 countries, will financially support Japanese companies’ effort to expand exports to this region. It is also expected to help further strengthen the economic relationship between Japan and Sub-Saharan Africa.*2
In order to support economic structural reform in Africa through economic diversification and industrialization, which was one of the top priority agenda items at TICAD VI, JBIC renewed the JBIC Facility for African Investment and Trade Enhancement (FAITH) of June 2013, and has launched FAITH2. This is the first loan agreement signed after the commencement of FAITH2.
As Japan's policy-based financial institution, JBIC will continue to financially support the Africa-bound exports of Japanese companies, as well as enhance opportunities for project participations in the region, 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 JBIC signed in February 2007 a loan agreement for setting up an export credit line with PTA Bank, and this will be the second loan agreement to be extended to the bank. See Press Release on February 13, 2007 for further details.