Buyer’s Credit to Russian Limited Liability Company Irkutsk Oil Company
Supporting Export of Set of Petrochemical Plant Equipment of Japanese Company
- Region: Europe
- Machinery and Equipment
- Export Loans
The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed on December 29 a buyer's credit (export finance) agreement amounting up to approximately USD522 million (JBIC portion) with Irkutsk Oil Company (INK), a Russian limited liability company. The loan is co-financed with Deutsche Bank AG, Tokyo Branch (Facility Agent), Societe Generale, Tokyo Branch, and Goldman Sachs Realty Japan Ltd. This brings the total co-financing amount to USD871 million. Nippon Export and Investment Insurance (NEXI) will provide the insurance to the consortium of the above-mentioned private financial institutions.
The loan is provided to INK, which in turn will lend the funds to Irkutsk Polymer Plant, INK’s wholly owned subsidiary. The purpose of the loan is to support the purchase of equipment from multiple vendors, with the main equipment for both the ethylene and polyethylene production facilities in the city of Ust-Kut, Irkutsk Region in East Siberia to be provided by Toyo Engineering Corporation.
With the growing demand for chemicals such as ethylene and polyethylene in Russian and Asian markets, a number of capital investments are also expected to increase in the petrochemical sector in Russia. INK aims to utilize its sizable gas resources and to diversify its business for the transition from the pure upstream oil production on which INK has primarily focused to the downstream sector such as the production of plastic. The loan will support Japanese companies with exports of equipment and create business opportunities for Japanese companies in the Russian petrochemical sector, thereby contributing toward maintaining and improving the international competitiveness of Japanese industry.
As Japan’s policy-based financial institution, JBIC will continue to provide support to assist Japanese companies in the exports of their goods and services such as plant equipment and the overseas expansion of their businesses by drawing on its various financial facilities for structuring projects and by performing its risk-assuming function.