- Region: North America
The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed today a memorandum of understanding (MOU) with the U.S. International Development Finance Corporation (USDFC; CEO: Adam Boehler).
USDFC was established in December 2019 as a financial institution of the Government of the United States of America and was transformed from the Overseas Private Investment Corporation (OPIC) of the United States to integrate some responsibilities of the United States Agency for International Development (USAID). USDFC supports mobilizing and facilitating the participation of private sector capital and skills in the economic development of less developed countries through equity investments, loans, guarantees, and political risk insurance for projects in order to complement the development assistance objectives, and also advances the foreign policy interests of the United States.
In November 2017, JBIC and OPIC signed an MOU*1 to support projects in sectors such as infrastructure, energy, and natural resources in which Japanese and U.S. companies participate. The cooperation with OPIC evolved into another MOU*2, which was signed in November 2018 by four organizations including the Department of Foreign Affairs and Trade (DFAT) and the Export Finance and Insurance Corporation (Efic, currently Export Finance Australia (EFA)), both of Australia. The organizations have developed a close partnership through, for example, structuring projects in the Indo-Pacific region and dispatching a joint mission.
This MOU is intended to further strengthen the cooperation that has been developed between JBIC and USDFC as well as OPIC since the signing of the MOU in 2017. In addition to conventional sectors of cooperation such as infrastructure, energy, and natural resources, the MOU is also intended to support projects in sectors including power, hydrogen, digital connectivity, information and communications technology, as well as supply chain resilience in the Indo-Pacific, Middle East, Africa, the Western Hemisphere, and Central and Eastern Europe. The Governments of Japan and the United States regard these sectors as important from economic and strategic perspectives, and JBIC aims to further support, through the partnership with USDFC, the promotion of projects in which Japanese and U.S. companies participate. Also, structuring projects in the Indo-Pacific region will contribute, in particular, to achieving a "Free and Open Indo-Pacific," which is being promoted by the two governments. Further, such initiatives are expected to strengthen the relationship between Japan and the United States. Expectations for the partnership between USDFC and JBIC are rising in the United States. This was exemplified by the political view expressed in an Armitage-Nye report*3 of the Center for Strategic and International Studies (CSIS), an influential bipartisan thinktank, in which they stated their opinion that USDFC should partner with JBIC and lead infrastructure development in the Indo-Pacific region.
As Japan's policy-based financial institution, JBIC will continue to actively support the creation and promotion of business opportunities for Japanese companies and contribute to the further development of economic relations between the two countries by collaborating closely with overseas policy-based financial institutions.