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Loan for Methanol Production and Sales Business in Saudi Arabia
Contributing to Securing Energy Resources for Japan under the Growth Investment Facility

  • Region: The Middle East
  • Energy and Natural Resources
  • Overseas Investment Loans
March 2, 2020
  1. The Japan Bank for International Cooperation (JBIC, Governor: MAEDA Tadashi) signed on February 28 a loan agreement amounting up to USD 432 million (JBIC portion) with Japan Saudi Arabia Methanol Company, Inc. (JSMC). The loan is co-financed with Mizuho Bank, Ltd. and MUFG Bank, Ltd., and extended under the Growth Investment Facility*1 / Overseas Business Expansion Window.
      
  2. In 1980, Saudi Methanol Company (AR-RAZI) was established through a joint venture of Saudi Basic Industries Corporation (SABIC) and JSMC, whose largest shareholder is Mitsubishi Gas Chemical Company, Inc. Since 1983, AR-RAZI has been producing and selling methanol in Al-Jubail Industrial City, the Kingdom of Saudi Arabia. JSMC and SABIC agreed to extend the term of the joint venture agreement for a further 20 years from the expiry date of the previous agreement in November 2018. This loan is intended to provide necessary fund for JSMC to continue this joint venture project.
      
  3. Methanol is primarily produced from natural gas, and has a wide range of applications, including as an additive in gasoline, fuel cells, and chemicals such as adhesives and synthetic resins. In this project, JSMC will continue to offtake a certain portion of the methanol produced by AR-RAZI and sell it mainly to companies in Japan. Since Japan has relied entirely on import for the methanol domestically consumed, this loan is intended to contribute to maintaining the overseas methanol production bases where Japanese corporations are participating, and to diversifying Japan's methanol supply sources, thereby contributing to securing stable supply of energy resources for Japan.
      
  4. As Japan's policy-based financial institution, JBIC will continue to provide financial support to the projects that contribute to securing important energy resources for Japan, by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.

     


      
Note
  1. *1 

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