Equity participations are capital contributions to companies where Japanese companies have equity stakes to undertake overseas projects, as well as funds where Japanese companies perform significant roles. In principle, equity participations take the following forms.
Advantages of Using Equity Participations
- JBIC supports overseas investment projects undertaken by Japanese firms by drawing on its knowledge and knowhow on host country economies and their investment projects.
- The political risk of the host countries will be mitigated by leveraging JBIC's long-cultivated ties with their governments and its position as an official financing institution. JBIC will support overseas projects by drawing on the knowledge it has acquired on host country economies and investment projects.
- The investing firms can turn to JBIC for making assessment of environmental and social considerations pertaining to their investment projects.
Utilizing Equity Participations
JBIC can make equity investments in the following cases.
Types of Projects
Note: JBIC may also make equity investment in the following cases where Japanese firms do not have equity stakes.
- Capital contribution to multilateral institutions and international funds when the projects to be undertaken by them will have concrete positive effects on the overseas business development of Japanese firms.
- Exerting a favorable impact on the preservation of global environment.
- Responding to disruption in general international financing activities.
While investments have to be made, in principle, in developing countries, projects in developed countries are also eligible in the following cases:
- Projects contributing to the overseas development and acquisition of resources that are strategically important for Japan
- Projects contributing to the maintenance and improvement of the international competitiveness of Japanese industries and associated with the following areas:
- Railways (high-speed, inter-city projects and projects in major cities)
- Road business
- Water business
- Biomass fuel production
- Renewable energy power generation
- Nuclear power generation
- Power transformation, Transmission and distribution
- Highly efficient coal-fired power generation
- Coal gasification
- Carbon capture and storage (CCS)
- Highly efficient gas-fired power generation
- Smart grid
- Development of telecommunications network
- Shipbuilding and Marine transport
- Satellite launching and operation
- Aircraft maintenance and sales
- Medical business(related to positron beam therapy facility)
- Petrochemical production
- Waste incineration and Waste to energy
- M&A activities, etc.
Percentage in Total Investment
In principle, 50 percent or less of the total investment and on the condition that JBIC will not become the largest shareholder among Japanese investors.
- In principle, the exit conditions should be set forth prior to making decision on equity participations.
- JBIC will basically limit its involvement in daily business operations and management to the minimum.
- JBIC may provide both equity and loans for the same project. (In that case, JBIC will only invest in preferred shares.)