- Region: Asia
- Machinery and Equipment
- Export Loans
The Japan Bank for International Cooperation (JBIC; Governor: Akira Kondoh) signed a loan agreement on July 25 in the amount of up to approximately JPY400 million (JBIC portion) based on a credit line*1 extended to the Government of Mongolia in June 2013. The loan is cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (lead arranger), bringing the overall cofinancing amount to approximately JPY800 million. The part of the cofinanced portion is insured by Nippon Export and Investment Insurance (NEXI).
The loan is intended to provide, through the Ministry of Finance of Mongolia and Trade and Development Bank of Mongolia LLC, the necessary funds for Khishig Arvin Industrial LLC, a Mongolian company, to purchase construction machinery made by Komatsu Ltd. and related services from SUMITOMO CORPORATION.
The enactment of the "Agreement between Japan and Mongolia for an Economic Partnership (EPA)" by the governments of Japan and Mongolia in June last year is expected to further enhance reciprocal economic cooperation and vitalize the two countries' economies in a wide range of fields, along with the liberalization and facilitation of trade and investment between the two countries. In addition, in March 2013, the "ERCH Initiative"*2 was proposed by Prime Minister Abe in expectation of promoting the economic relationship between the two countries. Following this initiative, in July 2014, "ERCH Initiative Plus"*3, and, in March 2017, the "Japan-Mongolia Mid-term Action Plan for a Strategic Partnership"*4 were agreed on by the two countries' leaders, supplementing the original and resolving to promote financing utilizing this credit line effectively. This loan is in line with such measures of the two countries, and through the promotion of Japanese exports, it contributes to maintaining and strengthening the Mongolian economy, as well as the international competitiveness of Japanese industries.
As Japan's policy-based financial institution, JBIC will continue to support the export of machinery and equipment and the overseas business deployment of Japanese companies, in foreign countries including Mongolia, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
- *1 See Press Release on June 6, 2013.
- *2 The proposal was made by Prime Minister Abe upon his visit to Mongolia in March 2013, for achieving vibrant economic relations between the two countries, with two pillars of (1) development of investment climate and (2) cooperation for sustainable economic development.
- *3 The proposal was made by Prime Minister Abe upon President Elbegdorj's visit to Japan in July 2014, for promoting Mongolia's exports and industrial diversification.
- *4 The mid-term action plan was agreed on by both governments upon Mr. Enkhbold, Chairman of the State Great Hural (Parliament) of Mongolia, and Foreign Minister Munkh-Orgil's visit to Japan in March 2017, as a roadmap for Japan-Mongolia relations for the next five years (2017-2021).