- Region: Latin America and the Caribbean
- Infrastructures
- Environment
- Export Loans
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The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed on March 27 a buyer’s credit (export loan) agreement amounting to up to approximately USD93 million (JBIC portion) with the Mexican government financial institution, Banco Nacional de Comercio Exterior, S.N.C., Institución de Banca de Desarrollo (BANCOMEXT), in its capacity as the trustee of a trust*1 under the auspices of the Comisión Federal de Electricidad (CFE) of Mexico. The loan is co-financed with Citibank, N.A., Tokyo Branch, bringing the total co-financing amount to approximately USD155 million. Nippon Export and Investment Insurance (NEXI) will provide insurance for the loan from the private financial institution.
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The loan is intended to provide the CFE group with the necessary funds to purchase power generation equipment, such as gas turbines manufactured by Mitsubishi Heavy Industries, Ltd. (MHI), through Mitsubishi Power Americas, Inc. and Mitsubishi Power de Mexico, S.A. de C.V., wholly owned subsidiaries of MHI, in order to establish a natural gas-fired combined cycle power plant with a total generation capacity of approximately 467 MW in San Luis Potosi, Mexico.
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The government of Mexico announced a greenhouse gas (GHG) emissions reduction target of 35% (compared to BaU*2) by 2030 under its Nationally Determined Contributions (NDC), an action plan that addresses climate change under the Paris Agreement, which aims to replace environmentally harmful thermal power generation with highly efficient gas-fired generation. The loan will support a Japanese company that is exporting gas-fired combined cycle power generation equipment, thereby supporting energy transition in Mexico and contributing toward maintaining and strengthening the international competitiveness of Japanese industries.
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As Japan’s policy-based financial institution, JBIC will continue to provide financial support to assist Japanese companies in the export of machinery and equipment and in the overseas expansion of their businesses by drawing on its various financial facilities and schemes for structuring projects and by performing its risk-assuming function.
Note
- *1 Fideicomiso de Proyectos de Generación Convencional No.10673 (FPGC)
- *2 Business as Usual: If the status quo is maintained without taking any reduction measures